Americans are Using Buy Now, Pay Later More Than Ever

October 15, 2026

Americans spent over $160 billion using buy now, pay later services in the previous year, with usage of pay-in-four plans surging nearly 80% since 2023, according to Federal Reserve research. Financial experts are observing increased reliance on these payment plans for basic necessities including groceries, utilities, and transportation as consumers struggle with rising costs and stagnant wages in a challenging economy. While these services often advertise interest-free terms, experts warn that varying conditions, missed payment penalties, and the potential for accumulating multiple loans can create financial pitfalls for users.

Who is affected

American consumers using buy now, pay later services ($160 billion in spending)
People struggling to afford everyday expenses like groceries, bills, transportation, and rent
Users of pay-in-four plans (accounting for half of total spending)
Individuals who miss payments and face fees, interest, or service bans
Consumers whose credit scores are now impacted by buy now, pay later activity
People with multiple stacked buy now, pay later loans

What action is being taken

Americans are spending over $160 billion using buy now, pay later plans
People are increasingly using these plans for everyday expenses like groceries, bills, transportation, and rent
Buy now, pay later agencies are reporting credit lending activity to major credit bureaus (Equifax, Experian, and TransUnion)
Affirm and Klarna are reporting to Experian and TransUnion
Consumers are utilizing multiple buy now, pay later plans simultaneously

Why it matters

This matters because buy now, pay later services have evolved from occasional purchase tools into essential financial lifelines for Americans struggling with rising costs of living that outpace income growth. The shift toward using these plans for basic necessities like food and bills signals financial distress among consumers during a challenging economic period. The changing credit reporting landscape means these previously consequence-free payment options can now impact users' long-term financial health and creditworthiness, particularly if payments are missed. The rapid growth and potential for debt accumulation through stacking multiple plans creates risks for vulnerable consumers who may lack alternatives for meeting basic needs.

What's next

Consumers should read contract fine print before committing to buy now, pay later plans
Users should verify how specific companies report to credit bureaus
Borrowers should assess whether amounts are manageable before purchasing
Consumers should track payment amounts and dates if using multiple loans
People struggling financially should explore additional resources like food banks, SNAP, or hardship programs
Those overwhelmed by debt should seek help from nonprofit credit counseling agencies through the National Foundation for Credit Counseling or Financial Counseling Association of America

Read full article from source: The San Diego Voice & Viewpoint