Released: December 20, 2023

Americans may be taking on too much pay-later ‘phantom debt’

Source: Ben Casselman & Jordyn Holman, N.Y.Times (Paid Registration)

“Buy now, pay later” loans which allow consumers to pay for purchases in installments, often interest-free, have soared in popularity because of high prices and interest rates.

But such loans may be encouraging younger and lower-income Americans to take on too much debt, according to consumer groups and some lawmakers. And because such loans aren’t routinely reported to credit bureaus or captured in public data, they could also represent a hidden source of risk to the financial system.

 

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