This holiday season, Americans are on track to charge more than $10 billion in “buy now, pay later” purchases, a cheerful 9% jump from last year. What could possibly go wrong when half the country decides that four easy payments sounds better than actually having money?
The good news: retailers are thrilled, Gen Z finally owns the air fryer they’ve been eyeing, and the packages arrive instantly. The slightly less good news: millions of those festive boxes come with invisible strings that quietly strangle checking accounts in January, turning “Happy New Year” into “Happy Overdraft.”
Financial therapists are already bracing for the post-holiday flood of clients who swear they only bought “a couple things” yet somehow owe twelve different fintech companies $87.63 on slightly different Tuesdays.
Adobe’s latest numbers show BNPL will top $10 billion this Christmas, which is economist-speak for “retail therapy just got a line of credit.”
PayPal’s survey found exactly half of holiday shoppers plan to use it, proving that nothing says “peace on earth” like splitting a $49.99 candle into four psychologically painless payments.
Younger shoppers adore the model. One in four Gen Z and millennial consumers now uses BNPL regularly, because apparently student loans weren’t enough installments in their lives.
Kevin King, vice president of credit risk at LexisNexis Risk Solutions, calls BNPL “unquestionably the most popular with consumers under 40.” Translation: Boomers still think “four payments of $19.99” is a late-night infomercial scam.
The pitch is seductively simple. Drop $400 on a winter coat, hand over $100 today, then forget about the rest until your phone buzzes with “Payment successful!” every other Thursday.
Interest is often zero for the classic “pay-in-four,” which feels like free money until you realize each purchase is its own tiny loan baby.
Buy ten gifts, get ten loans. Congratulations, your credit file now looks like a litter of kittens, all meowing for food on different schedules.
Shoppers cheerfully accept whichever provider pops up at checkout—Afterpay today, Klarna tomorrow, Affirm the day after—creating a debt portfolio more diversified than most 401(k)s.
King calls this sprawling web “shadow debt,” because it hides in the dark until three payments hit the same morning your rent is due.
Banks, unamused, simply return the rent check with the polite note “insufficient funds,” while the new espresso machine hums happily on the counter.
Regulators are watching nervously, retailers are counting cash, and consumers are learning that “buy now, pay later” sometimes translates to “panic now, pay forever.”
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