Buy Now, Pay Later: Difference between revisions
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===No safeguards=== | ===No safeguards=== | ||
Credit card companies generally report to the major credit bureaus such as Experian, TransUnion, and Equifax. Without reporting consumer information, BNPL lenders avoid common safeguards like spending limits, thus allowing consumers to accrue hundreds or even thousands of dollars in debt that otherwise wouldn't have been possible. This is particularly harmful because consumers tend to believe, and the lenders tend to advertise, BNPL services as a safer option compared to traditional credit cards. | Credit card companies generally report to the major credit bureaus such as Experian, TransUnion, and Equifax. Without reporting consumer information, BNPL lenders avoid common safeguards like spending limits, thus allowing consumers to accrue hundreds or even thousands of dollars in debt that otherwise wouldn't have been possible. This is particularly harmful because consumers tend to believe, and the lenders tend to advertise, BNPL services as a safer option compared to traditional credit cards. | ||
== Regulations == | |||
The prevalence of Buy Now, Pay Later loans has been most notable since the COVID pandemic in 2020, a time where people had done a lot of shopping online at home{{Citation needed}}. Because of this recent timeframe, legislation has been slow to mitigate the widespread effects. Most countries simply tacked BNPL services to pre-existing banking laws, but this has left many gaps in how the service is regulated. | |||
=== United States === | |||
=== New York's ''Buy Now, Pay Later'' Act === | |||
==Examples== | ==Examples== | ||