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Discussion Paper
How Does Buy Now, Pay Later Affect Customers’ Credit?
In this paper, we explore the relationship between consumers’ use of buy now, pay later (BNPL) and their credit reports. BNPL is a deferred payment tool that allows consumers to split transactions into four payments over six weeks. Unlike many other financial products, it is offered primarily by fintech companies and advertised to consumers as free from fees and credit checks. These providers typically do not report a consumer’s use of BNPL and subsequent repayment behavior to credit bureaus, which makes studies of BNPL users’ credit more challenging. In this analysis, however, we ...
Discussion Paper
How Does Buy Now, Pay Later Affect Customers’ Credit?
This paper explores the relationship between consumers’ use of buy now, pay later (BNPL) and their credit reports. We conduct this analysis to evaluate concerns that BNPL use could negatively affect consumers’ financial health.
Report
Buy Now, Pay Later: Who Uses It and Why
Buy now, pay later (BNPL), a short-term, interest-free credit option for retail purchases, is becoming increasingly popular. At roughly 9 percent (as of fall 2023), the share of all consumers using BNPL is still relatively low, but it has grown by about 40 percent from two years earlier. This brief shows that BNPL use is significantly higher among financially vulnerable consumers and disproportionately high among women, Black, and Latino consumers.