Buy Now, Pay Later loan program usage increasing across North Texas

DALLAS - A rise in Buy Now, Pay Later programs is leading to an increase in debt for many Americans, but the programs help some North Texas residents with everyday purchases.

Buy Now, Pay Later

What we know:

A Buy Now, Pay Later (BNPL) program offered by businesses like Klarna involves splitting the cost of a single purchase into multiple payments. 

In recent years, BNPLs have been used by many Americans to help make ends meet. A recent study shows 46% of Buy No, Pay Later purchases are for groceries.

More than two-thirds of BNPL borrowers have more than one loan.

What they're saying:

"Overall when you look at consumer debt, what we get from the Federal Reserve, it's that consumers are in desperate trouble right now."

SMU economist Mike Davis worries the increase in BNPL purchases could lead to increasing debt for low-income earners.

"It's good that you have these credit options available to you, but what we'd really like to see is an economy that's growing all across the board." 

Local perspective:

While the increase in BNPL programs could lead to financial issues for some, Dallas barber Tallie Cooper says the programs have helped him in times of need.

"With high grocery bills and gas bills right now, juggling them back and forth, the app was perfect because it gave me a chance to tone into my business," Cooper tells FOX 4's Shaun Rabb.

Cooper's shop was affected by the COVID-19 pandemic. Now, he says BNPL programs 

"For me, it's Buy Now, Pay Later. For a person who is a small business entrepreneur, always in traffic, in stores in and out, it was great for me because I don't have the money sometimes."