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As of August 22, 2025, buy now, pay later (BNPL) services have become a fixture of American shopping—online and in stores. But a growing body of data shows that the convenience comes with serious downsides: nearly one in four BNPL users made a late payment in 2024, and new credit scoring models from FICO will soon incorporate BNPL history, making missed payments a direct threat to credit scores. Consumer advocates warn that the ease of splitting payments into four installments can lead to overspending, stacking multiple loans, and costly penalties.
BNPL plans typically split a purchase into four equal payments: the first due at checkout, followed by three biweekly installments. They are linked to a checking account, and payments are automatically withdrawn. Most plans are interest-free if paid on time, which appeals to consumers who want to avoid credit card debt. In 2024, an estimated 87 million Americans used BNPL for everything from clothing and electronics to groceries and gasoline. A study from CapitalOne Shopping projects U.S. BNPL transactions will reach $133 billion by 2026 and $184 billion by 2030.
The model took off during the pandemic, driven by the surge in online shopping. Now, BNPL is offered by major lenders like Affirm, Klarna, and Afterpay, and is available on digital wallets such as Apple Pay and Google Pay. Merchants pay lenders 3% to 6% of the purchase price, far more than credit card processing fees, because BNPL is known to boost spending. Research in the Harvard Business Review found that BNPL users spend 17% to 26% more, and the effect lasts for nearly six months.
While BNPL loans are sold as “no surprises,” the risks are real. If a payment overdraws your account, the average overdraft fee is $27, according to Bankrate.com. But the bigger danger is late payment penalties. A Federal Reserve Bank of Kansas survey found that 24% of BNPL users reported a late payment in 2024, up from 18% the year before. And many users don’t stop at one plan: they stack multiple BNPL loans, making it easy to lose track of due dates.
“Most people who have buy now, pay later accounts don’t have just one—they have multiple,” said Lara Ceccarelli, a certified credit counselor at American Financial Solutions. “The payments can stack up quickly and leave you overextended in your budget.” Ceccarelli noted that many clients use BNPL to buy things they can’t afford, even though the loans are interest-free.
A major change is coming to credit scoring. In July 2025, the Consumer Financial Protection Bureau (CFPB) finalized a rule requiring BNPL providers to report payment history to the major credit bureaus. FICO, the company behind the most widely used credit scores in the U.S., announced that its new FICO 10 and FICO 10T models will incorporate BNPL data. This means that a single missed BNPL payment
