Source of this article and featured image is TechCrunch. Description and key fact are generated by Codevision AI system.
BNPL services are growing rapidly, with 91.5 million users in the U.S. and 25% using them for groceries, signaling financial strain. Default rates have surged to 42% in 2025, raising concerns about debt sustainability. These loans often go unreported to credit bureaus, creating ‘phantom debt’ that hides borrowers’ true financial status. Regulatory rollbacks under the Trump administration have weakened oversight, allowing BNPL companies to operate with less scrutiny. Experts warn this trend could mirror the 2008 crisis, with cascading risks across the financial system.
Key facts
- BNPL services now have 91.5 million U.S. users, with 25% using them to finance groceries.
- Default rates for BNPL loans rose to 42% in 2025, up from 34% in 2023.
- Most BNPL loans aren’t reported to credit bureaus, creating ‘phantom debt’ that obscures borrowers’ financial health.
- Regulatory changes under the Trump administration reduced oversight, allowing BNPL companies to operate with less scrutiny.
- Experts warn the BNPL trend could trigger systemic risks similar to the 2008 crisis due to its hidden nature and impact on vulnerable populations.
TAGS:
#BNPL #consumer debt #consumer finance #credit reporting #debt sustainability #economic indicators #financial crisis #fintech #regulatory changes #subprime lending
