From Yahoo Finance: 2025-05-21 16:30:00

Klarna reports more customers struggling to repay ‘buy now, pay later’ loans, echoing findings by Bankrate and LendingTree. This trend reflects faltering financial health in the US, with consumer debt hitting record levels. BNPL services are popular among younger shoppers, especially Black and Hispanic women, but may lead to overextension.

Klarna’s first-quarter consumer credit losses rose 17% year-over-year to $136 million, attributed to an increase in loans made. Despite this, the percentage of unpaid loans globally only grew slightly, with the company seeing no signs of weakened US consumers. BNPL providers originated $33.8 billion in loans for $277.3 million in merchandise in 2022.

The Consumer Financial Protection Bureau has decided not to enforce a Biden-era regulation on BNPL loans, treating them like traditional credit cards. This move has raised concerns among consumer advocates, who fear a lack of oversight and legal recourse for customers. Industry watchers warn of the risks of consumers taking out loans they cannot afford to repay, exacerbating financial stress.



Read more at Yahoo Finance: Why are more shoppers struggling to repay ‘buy now, pay later’ loans?