The Rising Risk of 'Buy Now, Pay Later' Holiday Debt

Buy Now, Pay Later options have surged in popularity during the holiday season, allowing consumers to pay off major purchases over time. While these services appeal to those without credit cards or those wary of adding to their credit card debt, they can also lead to overspending and confusion. Concerns have been raised about the potential for unmanageable debt, prompting Ohio Senator Sherrod Brown and other Democrats to urge federal regulators to monitor these products. Some Buy Now, Pay Later companies do not report to credit bureaus, making it difficult to track a consumer's payment history. Affirm, one of the companies in this space, states that they underwrite each transaction individually and only approve consumers for what they can repay.