Americans Making More Than $100,000 a Year Are 'Getting Into Trouble' With This Popular Personal Finance Habit "Buy Now, Pay Later" (BNPL) is gaining steam.

By Amanda Breen

Key Takeaways

  • BNPL options offered by companies such as Affirm, Afterpay and Klarna allow for purchases to be paid in installments.
  • A study found that nearly 46% of high-income consumers — those earning over $100,000 a year — use BNPL plans.
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As the holiday season winds down, many American consumers are turning to Buy Now, Pay Later (BNPL) options to alleviate the pressure of gift-giving amidst increasing credit card debts and surging inflation.

BNPL options offered by companies such as Affirm, Afterpay and Klarna allow for purchases to be paid in installments, often in six-week interest-free payments — but it's not without drawbacks, especially for users who overextend their budgets, Fox Business reported.

Related: Retailers Are Going to Shatter Discount Records This Holiday Season — But You'll Have to Shop the Right Way to Cash In

Americans are saddled with a record-breaking $1 trillion in credit card debt, per CNBC.

And point-of-sale lenders are cashing in: Affirm shares have spiked more than 400% this year, outpacing all U.S. tech companies worth $5 billion or more, NBC New York reported.

Ted Rossman, a senior industry analyst at, told Fox that BNPL is a form of debt with inherent risks, including potential interest rates as high as 30% APR. "Sometimes I hear of people getting into trouble with BNPL plans because they trick themselves into thinking they're spending less than they really are," he said, noting that the plans can also complicate returns and refunds.

However, it's not millennials, Gen Z or low-income consumers who are most likely to use these plans, according to a PYMNTS Intelligence research study.

The study found that nearly 46% of high-income consumers — defined as those making more than $100,000 annually — have used store card installment plans in the last 12 months before being surveyed, on average using the plans twice during that period.

Related: PayPal Co-Founder's Newest Startup Raises $100 Million to Reinvent Credit

All consumers should read the fine print of BNPL services carefully, understanding the length of the loan and interest rate, Rossman told Fox.

Amanda Breen

Entrepreneur Staff

Features Writer

Amanda Breen is a features writer at She is a graduate of Barnard College and received an MFA in writing at Columbia University, where she was a news fellow for the School of the Arts.

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