MONROE COUNTY, Pa. — Financial experts say from exercise equipment to furniture and more, buy now, pay later programs have been booming, especially over the pandemic.
“It’s not just that they’re being used, it’s that over a quarter of people don’t consider them to be a real form of debt, so they’re becoming kind of dangerous in that sense," said financial specialist Matthew Frankel of The Motley Fool.
A recent survey of 2,000 Americans just showed that about 60 percent used a buy now, pay later program in this year, which pros said is a huge increase since last year.
Those ages 18 to 24 were the largest group of users, and late payments this year have already affected nearly half of those people.
And of those asked, about 36 percent of people expect to make late payments within the next year.
"If you know you’re going to make a late payment, 'why are you using it' is kind of my thought process there," added Frankel.
Financial advisors said these kinds of payment programs are not necessarily bad, but many people don’t seem to understand the massive fees that can come with late payments or the fact that making payments on time does not help your credit score.
“Buy now, pay later services don’t report positive payment history to the payment bureaus; it can be a more useful financial tool," explained Frankel.