Buy Now, Pay Later Loans Surge in Popularity, Raising Concerns About Debt Burdens
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Data shows younger consumers and those with difficulty accessing credit use "buy now, pay later" loans most frequently, raising concerns about saddling them with debt.
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These short-term loans allow shoppers to make a down payment at checkout and pay the remainder in installments over weeks or months.
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One in five Americans plan to use these loans to purchase holiday gifts this year, with spending expected to peak at $9.3 billion on Cyber Monday.
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Critics worry these loans can lead to "loan stacking" since they often don't affect credit scores or get reported to other lenders.
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Users say the loans help them spread out payments interest-free, but if they miss payments they can face fees, interest, or get cut off from using the apps.