Buy now, pay later services were supposed to be the friendlier alternative to credit cards — split your purchase into four interest-free payments, skip the debt trap, and move on with your life. But the latest data tells a very different story.
According to a February 2026 report from LendingTree, 41% of BNPL users reported making a late payment in the past year, a sharp jump from 34% just one year earlier. That seven-point spike in a single year isn't a rounding error. It's a signal that household budgets across America are under serious strain — and that the convenience of splitting payments is masking deeper financial problems.
At the same time, a February 2026 report from the Federal Reserve Bank of Richmond estimates the total transaction value of BNPL loans reached roughly $70 billion in 2025, growing at around 20% per year since 2021.
The key numbers: BNPL delinquency by the data
The trend line is moving in the wrong direction. LendingTree's survey found that while most late payments — roughly 76% — were only about a week overdue, the upward trend is alarming. The Federal Reserve reported that in 2024, 24% of BNPL users paid late at least once, up from 18% in 2023. The CFPB found that 4.1% of all BNPL loans were assessed a late fee in 2023.
Sources: Federal Reserve (2023-2024), LendingTree (2025-2026)
The Motley Fool's 2025 report found that 29% of BNPL users have made a late payment, with Gen Z reporting the highest rates. 19% of all BNPL users said they've completely lost track of upcoming payments.
From checkout splurges to the grocery aisle
LendingTree's data reveals that 25% of BNPL users are now financing groceries — nearly double the 14% from one year earlier. When consumers turn to installment loans for food, that's a financial stress indicator, not a shopping trend.
Why this matters:
Groceries are consumable — you eat them and they're gone. If you're taking out an installment loan for food and falling behind, you've paid a premium for groceries you've already consumed.
Gen Z leads in BNPL grocery use at 33%. This generation faces a unique financial squeeze: high inflation, student debt, and rising rent. For them, BNPL may function more like a paycheck bridge — which mirrors payday lending behavior patterns.
If rising costs are affecting your ability to make payments, improving your credit score becomes even more important — better credit opens the door to lower interest rates that can ease financial pressure over time.
Loan stacking: the hidden debt spiral
"Loan stacking" — holding multiple active BNPL loans simultaneously — is one of the most dangerous patterns in the BNPL landscape.
- 23% of BNPL users have had 3+ active BNPL loans at once (LendingTree, 2026)
- 63% of BNPL borrowers had simultaneous loans during 2021-2022 (CFPB, 2025)
- 71% of Gen Z BNPL users have held multiple loans simultaneously
- 61% of BNPL users have subprime or deep subprime credit scores (CFPB)
A January 2025 CFPB study found that frequent BNPL users carry $453 more in personal loans and $871 more in credit card debt than non-users with similar credit profiles. This creates "phantom debt" — obligations invisible to traditional lenders. For many consumers, BNPL is layering on top of existing credit card debt that's already at record levels.
How BNPL now affects your credit score
In June 2025, FICO announced two new credit scoring models — FICO Score 10 BNPL and FICO Score 10 T BNPL — that incorporate buy now, pay later data for the first time.
Potential upside
On-time BNPL payments may improve your score — especially for thin credit files. FICO testing showed most users with 5+ loans saw stable or improved scores.
Potential downside
Late payments will now be visible and can lower your score. Opening many BNPL accounts quickly may signal financial strain.
More than 60% of BNPL users incorrectly believe on-time payments already help their credit score. For 85% of consumers, FICO estimates the new models will result in approximately plus or minus 10 points — similar to opening any new credit account.
Pro tip:
Set up autopay or calendar reminders for every BNPL installment. For more on factors that influence your score, see our guide on
how to improve your credit score
.
The regulatory blind spot
BNPL providers aren't classified as traditional lenders, so they aren't subject to the same federal protections as credit cards. They don't have to comply with the Truth in Lending Act (TILA). The CFPB has pushed for greater oversight, but the regulatory landscape remains fragmented.
How to protect yourself
Treat BNPL like real debt
Track every active loan, payment date, and outstanding balance. The average BNPL late fee was $9.99 in 2023 (CFPB), and with the new FICO models, late payments could now affect your credit score.
Avoid using BNPL for essentials
If you're financing groceries or gas with installment plans, your budget needs a deeper review — not another BNPL loan.
Ask for late fee waivers
90% of people who asked to have a BNPL late fee waived were successful in at least getting it reduced (LendingTree, February 2026).
Monitor your credit report
As BNPL data starts appearing on credit reports, check your reports regularly. Credit Refresh can help you scan your reports for errors and manage the dispute process across all three bureaus.
Keep BNPL from hurting your credit
Credit Refresh scans your reports and helps you dispute errors before they cost you.
Check your credit report
The bottom line
Buy now, pay later isn't inherently dangerous. But when 41% of users pay late, a quarter finance their groceries, and most borrowers have subprime credit scores, the "pay later" part is arriving with consequences many didn't anticipate. With FICO now incorporating BNPL data, those consequences are about to become much more visible — and permanent.
Review your active BNPL obligations, set up payment reminders, and take control of your credit report. What you don't know about your financial profile can hurt you.
If you're also carrying credit card balances alongside BNPL loans, read our guide: Buried in Credit Card Debt? Don't Feel Stupid — the data shows that most credit card debt comes from emergencies and essentials, not overspending.
Sources
- LendingTree. February 2026 BNPL Tracker. lendingtree.com
- Federal Reserve Bank of Richmond, Economic Brief No. 26-05. February 2026. richmondfed.org
- CFPB. The Buy Now, Pay Later Market. December 2025. consumerfinance.gov
- CFPB. Consumer Use of BNPL and Other Unsecured Debt. January 2025. consumerfinance.gov
- FICO. BNPL Credit Scores Announcement. June 2025. fico.com
- The Motley Fool. 2025 BNPL Trends Study. fool.com
- Money.com. September 2025. money.com
- Empower. 2025. empower.com