We’re living in a time when you can finance pizza. Where $100 jeans can be split into four easy payments. Where “zero interest” sounds like free money. But behind the buzzwords and flashy apps, Buy Now, Pay Later (BNPL) is turning into one of the most financially destructive forces in America.
What started as a clever tech innovation to help people “manage cash flow” has become a full-blown debt trap — one that’s quietly ruining the financial health of working families across the country. BNPL is marketed like a budgeting hack, but it’s really the worst thing that’s happened to consumers since payday loans.
Let’s cut through the hype and look at the facts. According to a 2023 report by TransUnion, BNPL usage soared 43% in a single year. Roughly 40% of users have missed at least one payment, and those missed payments often come with hefty late fees or aggressive collections. A 2023 CFPB report indicates that among consumers in households charged an insufficient funds (NSF) fee in the past year, 85% were also charged an overdraft fee.
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Meanwhile, Americans are already up to their eyeballs in other forms of debt. Credit card balances have now hit an all-time high of $1.12 trillion, according to the Federal Reserve Bank of New York. Auto loan delinquencies are rising fast — over 7.6% of borrowers are 30 days past due, the highest level in over a decade. And since the federal student loan pause ended, more than 40% of borrowers haven’t resumed payments. We’ve built a nation that’s not just living paycheck to paycheck — it’s now borrowing paycheck to paycheck.
And BNPL is pouring gasoline on that fire.
Here’s why it’s so dangerous: it doesn’t feel like debt. When you swipe a credit card, you know you’re borrowing. When you click “pay later” on a website, it feels like nothing happened. But something did happen — you took out a loan.
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And instead of thinking about the total cost, consumers focus on the $25-a-week illusion. It’s predatory because it masks the risk. It convinces people they can afford things they absolutely cannot.
I’m seeing it firsthand in conversations across the country: People don’t even realize how many plans they’ve signed up for. Klarna here. Afterpay there. Affirm on something else. According to industry data, the average BNPL user has four to six active plans — but most couldn’t tell you the total amount they owe.
And it’s not just big-ticket items like laptops or furniture anymore. People are now financing gas, groceries and takeout. Think about that: We’re borrowing money to buy things that are gone in a week. Even short-term loans to make it to our next paycheck.
This isn’t just financially unsound — it’s culturally dangerous. BNPL is normalizing the idea that you deserve to have something now and worry about paying for it later. It’s instant gratification on steroids. It’s teaching young people that budgeting means stacking multiple payment plans — not actually saving money.
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You know what system worked better when I was growing up? Layaway. That’s right — good, old-fashioned, unglamorous layaway. You saw something you wanted. You made small payments. And only after you paid in full did you walk out the door with the item. No debt. No fees. No collections. Layaway required patience. It taught discipline. It was about saving before you spent.
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BNPL flips that on its head. It removes friction. It encourages consumption without consequence. Retailers love it because it boosts sales. Tech companies love it because it boosts engagement. But the American consumer? They’re the ones stuck holding the bag when all those “easy payments” come due at once. It’s the same trap as payday loans, just with better branding.
Even regulators are waking up. The Consumer Financial Protection Bureau has flagged BNPL for deceptive practices, lack of transparency and the use of consumer data for marketing. But they’re behind the curve. This market has already ballooned to $80 billion in annual transactions—and it’s only getting bigger.
So, what’s the solution?
We need to go back to basics. We need to teach people to save before they spend. It’s called delayed gratification and people in America just don’t understand this concept anymore. We need to stop pretending that BNPL is some kind of harmless financial tool. It’s the fast track to delinquency and bankruptcy for people who can least afford it.
And maybe, just maybe, we need to bring back the layaway counter at your local department store. Because the lesson there was simple but powerful: If you can’t pay for it today, wait until you can. That’s how wealth is built — not through apps, not through gimmicks, and certainly not through “four easy payments.”