Buy Now Pay Later Loans

 

What is "Buy Now Pay Later?" Consumers pay for purchases at stores via four installments -- one at the time of purchase, then three more, every two weeks for the next six weeks, to a “Buy Now Pay Later” lender. The consumer gets no Truth in Lending disclosures, which would list all fees and interest. While the BNPL companies say there is no interest, there will be late fees, bounced check fees, and more. Some companies want a monthly subscription fee. The more payments per month, the easier it is to forget a payment-- running up late fees and delinquency. The New York Times Magazine (Oct. 7, 2025) published an excellent article about a person who was trapped in a “vortex of debt”-- $50,000 in BNPL loans.

 

There are many other problems with BNPL: What happens if the goods are defective and need to be returned?? The Truth in Lending Act has clear protections for consumers, but BNPL is wild west—you are on your own. BNPL also risks overdrawing your checking account and default on your credit card if the card is used for paying the BNPL loan. Such default will be reported to credit bureaus. The National Consumer Law Center has an excellent article on the risks and advice for ‘Buy Now Pay Later’ customers.

 

Unfortunately, the U.S. Consumer Financial Protection Bureau in 2025 decided not to enforce an interpretation which would have required the BNPL companies to make the Truth in Lending disclosures for open end credit.

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If you think you have been cheated, consult a consumer attorney.

Consumers with debt burdens impossible to pay, may wish to consult a bankruptcy attorney.

If you think you can pay your way out, get help from a nonprofit credit counseling agency.

For-profit debt adjustment companies have many problems, and are illegal in New Jersey.

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