It’s an easy payment option that experts warn is becoming a debt trap for millions.
More Americans are turning to buy now, pay later (BNPL) apps to cover necessities like groceries, and many are falling behind on their payments.
A recent LendingTree report shows nearly 1 in 4 BNPL users have taken out loans just to buy groceries — almost double the share from a year ago, and nearly half of all users missed at least one payment in the past year.
“When you miss a payment, you owe a bunch of interest,” said Kyle Moore, a financial planner with Quarry Hill Advisors in St. Paul. “You’re going to get hit with fees, and it’s just going to be a bad compounding problem. Your credit score may take a hit as well. You’re kind of sticking your future self with the problem, so you’re getting all the benefits today without really having to suffer the consequences yet.”
Financial experts recommend not using BNPL apps unless you can actually pay later.
Local impact
On Sundays at St. Michael’s Lutheran Church in Roseville, Pastor Brad Froslee preaches about life challenges. On Tuesdays, a food truck stops at the church to help families in need.
“We’re seeing a lot of families really struggling,” said Froslee. “We’re seeing a significant amount of need.”
That is turning some parishioners toward BNPL services.
“It doesn’t surprise me, but it does make me sad,” said Froslee.
Pastor Froslee said the church cannot fix every challenge, but the food truck is one way to help neighbors.