‘Buy now, pay later’ loans now financing essential bills like rent and utilities

By the Editorial Team · Tuesday, August 18, 2026

Buy now, pay later (BNPL) loans are increasingly being used by consumers to cover essential household expenses such as rent, utilities, and insurance, rather than just retail purchases. This shift highlights growing economic pressures on middle-class families but raises concerns about long-term financial strain due to the added interest and fees associated with BNPL financing.

“Buy now, pay later” (BNPL) loans, initially popularized as a tool for online shoppers to make retail purchases without credit cards during the pandemic, are increasingly being used to finance essential household expenses. Several lending platforms, including Flex and Zip, now allow customers to use BNPL loans to pay for necessities such as broadband, electricity, health insurance, mobile phone service, mortgage, and water bills. Affirm, a leading provider in the BNPL market, has also begun offering loans to some tenants, enabling them to delay rent payments by a few weeks.

Industry experts note that BNPL financing is evolving into a form of working capital for many middle-class consumers. Karen Webster, CEO of payments industry research firm Pymnts, described this trend as consumers relying more on BNPL loans for everyday essentials rather than discretionary spending.

This shift is occurring amid rising economic pressures, as many households increasingly depend on debt to cover their basic living costs. The added interest from BNPL arrangements can further compound the overall cost of living, which has been climbing due to higher prices for healthcare, housing, and fuel.

Recent data from Federal Reserve economists indicate that Americans spent approximately $160 billion on BNPL loans in 2023, nearly doubling the amount from two years prior. While this figure remains modest compared to the over $3 trillion U.S. consumers spend annually on credit cards, the BNPL sector continues to grow rapidly, with double-digit annual increases reported.

Critics caution that while BNPL loans meet the immediate financial shortfall faced by many, the fees and interest can exacerbate consumers’ fiscal challenges over time. Lauren Saunders, senior attorney at the National Consumer Law Center, emphasized that simply adding debt and fees to monthly budgets without addressing underlying financial instability is not a sustainable solution for households struggling with essential expenses.

As BNPL services expand beyond retail purchases into critical living costs, regulators and consumer advocates are paying closer attention to the potential risks posed by increased reliance on short-term financing for basic needs.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.