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The Daily

‘Buy Now, Pay Later’: A New Wave of Consumer Debt

September 08, 2026 • 24m

Summary

⏱️ 8 min read

Overview

The Daily examines the explosive growth of buy-now-pay-later loans in America, revealing how these short-term installment loans have evolved from facilitating online impulse purchases during the pandemic to becoming essential lifelines for Americans struggling with basic necessities like groceries and rent. Reporter Stacey Cowley explores both the appeal of these easy-to-obtain loans and their hidden risks, including how they can trap financially vulnerable consumers in cycles of debt while operating largely outside traditional credit regulation.

The Rise of Buy-Now-Pay-Later Loans

Buy-now-pay-later loans are short-term installment loans that allow consumers to space out payments over weeks rather than paying upfront. These loans have exploded in popularity, with Americans spending roughly $160 billion through them last year—double what they spent two years earlier. The loans are remarkably easy to obtain, often requiring just minutes for approval and offering credit lines up to $6,000, making them increasingly ubiquitous at both online and physical retail checkouts.

  • Buy-now-pay-later loans let you purchase items and split payments over time, typically in installments every two weeks
  • Approval takes just minutes - one reporter got a $6,000 credit line five minutes after downloading an app
  • About half of Americans have used these loans at some point in recent years, with 15-25% using them regularly
  • Americans spent about $160 billion through these loans last year, roughly twice what they spent two years earlier
" Five minutes later, I had a $6,000 credit line and a whole list of merchants I could go spend it at. "
" About half the people who use buy now, pay later loans say they couldn't make the purchase without them. "

Pandemic-Era Origins and Influencer Culture

While buy-now-pay-later loans originated in Europe and Australia about 15 years ago, they truly skyrocketed during the pandemic when people were sitting at home doing extensive online shopping. The growth coincided with the rise of influencer culture on Instagram and TikTok, where content creators normalized using these services for shopping sprees and purchases, making them part of the cultural zeitgeist and encouraging impulse buying behavior.

  • The pandemic was the pivotal moment when buy-now-pay-later loans skyrocketed due to increased online shopping
  • Initially the loans came with no fees because merchants were paying the costs to facilitate sales
  • The growth coincided with the takeoff of influencer culture, with creators bragging about shopping sprees using these services
  • Influencers normalized the loans as a way to experience things even without money right now
" It became in the zeitgeist and kind of normalized that this was a way of paying for things you might want to go purchase. "
" Life is too short to not experience things because you don't have the money right now. Baby, put it on the payment plan. "

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