Are you too broke for Buy Now Pay Later? 😏

Ever missed an AfterPay bill or three?

You don’t have to tell us.

Just know that if you’ve ever skipped a payment or funded something you really couldn’t afford – you aren’t the only one.

Apparently, BNPL borrowers are broke enough to put the apps in financial trouble.

Klarna lost a whopping $99 million in Q1 of 2025. (Q1 means the first quarter of the year, so January, February, March, and April.)

We find that kind of funny since BNPL apps are kind of predatory and Klarna tried screwing their employees over for AI.

But what isn’t funny? How many people are getting sucked into this mess and getting set up for serious financial issues.

Klarna and other BNPL apps aren’t just losing money. BNPL is also growing at a staggering rate – adding millions of users and hundreds of thousands more retail partners for us to shop from. Yay.

And it just so happens that BNPL debt is about to show up on credit reports.

How Many People Use Buy Now, Pay Later?

Klarna might have lost $99 million but it also now has almost 100 million active users – up around 15 million from last year. Other apps are smaller in comparison, but still have a lot of users.

BNPL App	Active Users in 2025	Points
Klarna	100 million	Up from 84M in 2024. Might be fastest growing BNPL.
Affirm	~22 million	Grew 23% year-over-year & has 2M Affirm Card users.
Afterpay	~19.3 million (in the US)	Part of Block Inc. with Square, Cash App, & Tidal.
Sezzle	2.7 million	Super popular in Canada, with over 1.5M sign-ups.
Zip	6 million	Snatching users in Australia, New Zealand, U.S.
Humm	2.7 million	Popular in Australia & NZ.
PayPal Pay in 4	Secret 🤔	A go-to for Gen Z & Millennials.

Ok, so what? BNPL gives us instant funds with no credit checks, interest, or fees. And isn’t splitting a big purchase into a few manageable payments more responsible than putting it on a card?

Not to be a wet blanket, but doom signals are showing.

The BNPL Debt Doom Signals

We spot three growing signs of a serious buy now pay later debt crisis.

Signal One – Unconsciously financing an unaffordable lifestyle with BNPL.

Think Beyoncé and Lollapalooza tickets. Airline tickets, hotels, and other YOLO spends.

Financing big purchases isn’t inherently bad. But unconscious overborrowing and debt creep is.

BNPL is so easy to get and use that most people use multiple services – making it easy to lose track of what we’re spending. (More on that below.)

Signal Two – Financing daily life with BNPL.

Like groceries, gas, and car parts. DoorDash takeout. Walmart, Target, and CVS. Even Shein or Temu.

A full 25% of BNPL users bought groceries on loan. And for Gen Z, that number goes to 33%.

We all have to eat, so as concerning if you have to finance food We won’t bash anyone for financing staples like food.

Signal Three – Missing BNPL payments.

Forgetting your repayment schedule is one thing. Being late or unable to pay is another.

BNPL usage has grown over 300% since 2020, but delinquencies are also rising.

According to a 2024 TransUnion study, 1 in 3 BNPL users in Canada missed a payment in the past 12 months.

Who’s Falling into the BNPL Debt Trap?

Experts swear everything’s fine. After all, the high income are supposedly the main BNPL users.

But look at these usage facts from the Consumer Financial Protection Bureau (CFPB). 😕

Almost two-thirds of BNPL loans go to borrowers with lower credit scores.
BNPL borrowers are more likely to hold higher balances on other credit accounts.
Most BNPL borrowers took out multiple simultaneous BNPL loans.
More than one-fifth of consumers have used BNPL.
Younger borrowers held more BNPL debt as a percentage of their total consumer debt.

Yikes.

Turns out BNPL is sucking in vulnerable demographics – mainly younger buyers, lower-income households, and people with limited credit access.

A recent Credit Karma report found that over 40% of Gen Z users regretted a BNPL purchase.

Buy Now, Pay Later could cost so much more than you think.

BNPL is crazy popular, easy to get, and so tempting to use. Especially if you can’t access other credit forms or don’t have the spare cash for something you want right now.

Problem is it’s easy to overspend, lose track of your repayment schedule, and end up owing more than you can repay.

We might be seeing the beginning of a serious crisis.

More of us are missing payments and finding ourselves with a pile of purchase debt we can’t really manage.

There are loose regulations and lower consumer protections around Buy Now, Pay Later apps. And to make things worse, reports are hinting that BNPL might be coming for our credit scores!

So we’ll be keeping an eye on this.