Buy Now, Pay Later (BNPL) is one of the newest short-term credit options available in the marketplace today. It is designed to be an interest-free way of splitting the cost of a good or service into smaller payments, to be repaid in full over the course of six weeks. BNPL has seen exponential growth over the last five years, yet it is still a highly unregulated form of credit. The study will explore the profile of the typical BNPL user financial behavior with the ultimate goal of answering the question of whether BNPL is a prudent financial practice utilized by the financially savvy or a predatory form of credit designed to target the financially vulnerable. The 2023 Survey of Household Economics and Decision-Making (SHED) to attempt to answer these questions. Finally, this study advocates for regulatory bodies in the United States to devise legislation to protect the most vulnerable from some of the most potent risks of BNPL products, including loan stacking and overextending for the study results show that BNPL is predatory.
