A record number of Americans are considering short-term financing options, or “buy now, pay later” (BNPL) loans, to cover their purchases, according to a recent survey by an online lending marketplace.

More Americans Rely On Loans for Basics, GenZ Leads Surge

A LendingTree survey across 2,000 respondents found that 41% of Americans considered using a BNPL loan in August -- a 5% rise from July and the highest monthly level recorded since the firm began tracking the data in December 2021. Among current BNPL users, 41% said they made a late payment in the past year, up from 34% the year before, reported Newsweek.

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Once popular for non-essential spending, these loans are increasingly being used for daily necessities like groceries and fuel, highlighting the rising financial pressures facing U.S. consumers.

Half of respondents (50%) said they plan to take a BNPL loan within the next six months, up from 45% in July. Among existing BNPL users, 60% reported holding multiple loans simultaneously. Gen Z's borrowing habits stand out, with 64% of respondents reporting they've used a BNPL loan, and 71% of them admitting to carrying multiple loans at the same time.

Carol Pope, a personal loans expert at LendingTree, told Newsweek, “juggling multiple BNPL loans is unfortunately common--and risky.”

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Consumers Turn to BNPL Amid Inflation Pressures

The surge in BNPL loan usage reflects the financial challenges faced by many Americans. The widening gap between wages and inflation is forcing consumers to seek alternative financing options to make ends meet.

American wages continue to lag behind inflation, with some professions experiencing wider gaps than others. This economic strain is driving consumers to seek out BNPL loans as a means of bridging the financial gap.

Additionally, the recent surge in inflation, fueled by tariff-driven pressures, has further exacerbated the financial challenges faced by many Americans. As a result, consumers are turning to BNPL loans to manage their everyday expenses, a trend that could have long-term financial implications.

DoorDash Adds Klarna; Walmart Ramps Up Discounts

Companies are adapting to shifting consumer spending habits with new payment options and deeper discounts amid rising costs. In March, DoorDash (NASDAQ:DASH) partnered with Klarna to let customers split their food delivery bills into four interest-free installments or postpone payments to match their payday.

Meanwhile, Walmart Inc. (NYSE:WMT) is ramping up discounts to offset tariff-driven cost pressures, as the retail giant observes middle- and lower-income consumers adjusting their spending patterns in response to rising prices.

Installment Loans Boom As Critics Call It ‘Predatory’

In the U.S., BNPL spending is projected to reach $116.7 billion in 2025, underscoring its rise as a mainstream financing tool, eMarketer data shows.

Conservative activist Charlie Kirk warned on Tucker Carlson's show that services like Klarna, Affirm (NASDAQ:AFRM), AfterPay, owned by Block Inc. (NYSE:XYZ), and promote "predatory" debt among young Americans through largely unregulated lending practices.

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• Mohamed El-Erian Slams ‘Backward-Looking’ Powell, Question’s Fed’s 2% Inflation Target--’Being Too Late’

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.