The Rising Concern of Americans' Pay-Later Debt
"Buy Now, Pay Later" loans, which allow consumers to pay for purchases in installments, have surged in popularity during the pandemic as online shopping increased. However, economists are concerned that these loans may be encouraging younger and lower-income Americans to take on excessive debt. Since pay-later loans are not routinely reported to credit bureaus, they represent a hidden source of risk to the financial system. While traditional measures of consumer credit indicate overall healthy household finances, the rapid growth of pay-later loans could be masking cracks in Americans' financial well-being.