As buy now, pay later plans become a popular checkout option, experts warn about the dangers of loan stacking and rising consumer debt, emphasising the importance of managing multiple plans responsibly.
Buy now, pay later plans have become a familiar checkout option, but ABC7 Chicago’s I-Team says the convenience can disguise how quickly the bills can build up. The warning is simple: a purchase that feels manageable in instalments can become costly if several loans are running at once.
Money Management International says the main danger is loan stacking, when shoppers juggle multiple buy now, pay later accounts and lose sight of what they owe. LendingTree’s latest survey found that 47% of BNPL users made at least one late payment in the past year, while another survey put the figure at 42% and found that almost half of users have missed a payment at some point.
The problem is not limited to occasional overspending. LendingTree also reported that 43% of Americans have used a BNPL service and that many are relying on it repeatedly, with some using it as a bridge between paycheques. Another LendingTree survey found that nearly 70% of users said they spent more than they would have if they had paid upfront, underlining how instalment plans can encourage higher spending.
Consumer experts say the safest approach is to judge the full purchase, not just the instalment. In other words, ask whether the item is affordable in cash terms and whether there is a clear repayment plan before clicking through. For disciplined users, BNPL can help spread the cost of a necessary purchase, but the risk rises quickly when it is used for routine spending or when multiple balances overlap.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
