Federal Reserve Reports One in Six Adults Use BNPL Loans

The Federal Reserve System reports that approximately one in six adults used Buy Now, Pay Later (BNPL) services in the past year. Consumers are increasingly adopting these loans to stretch household budgets, using them to split costs for a wide range of expenses including rent and groceries.

While these services are popular because they often avoid traditional credit checks, Consumer Reports warns that the trend may lead to unsustainable debt accumulation. The organization notes that users who stack multiple loans risk missed payments and overdraft fees.

Furthermore, Consumer Reports highlights a lack of federal protections for BNPL users, specifically regarding returns and billing disputes that typically accompany traditional credit cards. The organization advises consumers to evaluate the total cost of these loans, including interest and fees, and to compare them against traditional bank loans for larger purchases.