“Buy now, pay later” (BNPL) has exploded from a niche checkout button to a default way to pay. These short-term installment plans—often “pay-in-four” over six weeks—promise zero interest, quick approvals, and a smooth checkout flow. The result: more people use them, use them more often, and juggle multiple BNPL plans at once. In 2022, about 21% of U.S. consumers with a credit record used at least one BNPL loan, up from 17.6% in 2021; the average borrower increased their annual originations from 8.5 to 9.5, and roughly one-fifth qualify as “heavy users” taking more than one BNPL loan a month.
How repayments actually work
The most common BNPL format is “4-in-6” (four equal payments over six weeks). The first quarter is due at checkout; the remaining three are auto-debited every two weeks. These plans typically carry 0% interest, but late fees can apply if you miss a scheduled debit. Longer-term BNPL offers (stretching three to 60 months) can carry interest similar to personal loans. For example, Affirm—one of the largest providers and Amazon’s BNPL partner—discloses APRs ranging from 10% to 36% depending on credit and merchant promotions.
Will people really pay them off during the 0% window?
The Federal Reserve Bank of Philadelphia survey data showed that roughly 25% of users made a late payment in the 4th quarter of 2024. By comparison, in 2021, just 10.5% of users were charged at least one late fee.
Interest rates and fees: where costs creep in
Pay-in-four plans are marketed as fee-free, yet missed autopays can trigger late fees, and disputing returns can be clunky—your installment may be due before a refund posts. For longer plans, interest can be substantial. Clear terms help, but stacking multiple loans across apps can make total obligations hard to track.
Ubiquity drives usage—and overspending risk
BNPL shows up almost everywhere now: fashion sites, grocery apps, travel portals—and Amazon checkout. That ubiquity encourages impulse add-ons and “mental accounting” that understates the true monthly burden. There has been a sharp expansion beyond discretionary categories into more “everyday” purchases, a sign that BNPL is moving from being a nice-to-have to household cash-flow tool to a danger we are constantly tempted by.
How big has BNPL become?
Industry growth has been striking. Five major BNPL firms originated $24.2 billion in loans in 2021, nearly triple 2020 and over twelve times 2019. At the user level, simultaneous loans are common: 63% of borrowers in 2022 had multiple BNPL loans at some point, and a third did so across multiple firms—behavior that can amplify budgeting risk.
Be careful, a “tool” like this can very quickly become a liability that follows you for years.