When you buy something with Buy Now Pay Later, a short-term financing option that lets you split payments over weeks or months, often with no interest if paid on time. Also known as BNPL, it’s become a default way to pay for everything from sneakers to laptops—especially for younger shoppers. But as more people take on multiple BNPL loans, the number of Buy Now Pay Later returns, instances where consumers miss payments and the debt is written off as uncollectible is climbing fast.
This isn’t just about missed payments. It’s about how BNPL charge-off rates, the percentage of BNPL loans that lenders can’t recover are rising faster than credit card defaults in some cases. Companies like Affirm, a major BNPL provider that reports delinquency trends publicly and Klarna, a Swedish fintech that saw credit losses spike in 2023 are now revealing how many customers are falling behind. The biggest risk? People using BNPL at three or more stores at once, often without realizing they’re carrying debt. Under-30 users are most affected—not because they’re irresponsible, but because they’re new to credit and don’t see these small payments as real loans.
Regulators are watching closely. The CFPB has started pushing BNPL firms to report delinquency data like banks do. That means what used to be hidden inside private company reports is now becoming public. And lenders are changing their rules—slowing approvals, lowering limits, and adding soft credit checks. But the real story isn’t just about risk. It’s about how these returns expose a deeper flaw: BNPL was sold as a harmless alternative to credit cards, but it’s acting like one without the same protections. No grace periods. No clear monthly statements. No easy way to pause payments when life gets tough.
What you’ll find below are real breakdowns of who’s defaulting, why it’s happening now, and how the system is adapting. No fluff. Just facts from the data lenders don’t want you to see—and what it means for anyone using BNPL today.
BNPL chargebacks and returns are more complex than credit card disputes. Learn how to handle installment payment disputes with Affirm, Klarna, and Afterpay-before you lose money.
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