Rent now, pay later services are gaining popularity as housing costs rise. Companies like Flex and Livble offer renters the option to split rent payments, but consumer advocates warn of high fees and interest rates. Roughly 109 million Americans are renters, with many already burdened by high rent payments consuming 30% or more of their income.

Flex, one of the largest rent-splitting companies, reports 1.5 million customers sending $2 billion in rent monthly. Most users have lower incomes and weaker credit profiles, with a median credit score of 604. Livble charges renters fees ranging from $30 to $40, translating to high effective annual percentage rates.

Affirm is piloting a program with Esusu to split rent into two payments, aiming to help consumers build credit. Landlords are also accepting credit cards for rent payments, but processing fees can be costly. Economists and advocates worry that these financing options do not address the root issue of affordability in the rental market.

Flex, Livble, and Affirm offer rent-splitting solutions, but critics argue that these options may not address the underlying problem of rent affordability. Landlords passing credit card processing fees to tenants could lead to higher rents. Advocates fear that the rental market may follow similar patterns, potentially exacerbating the issue of housing affordability.

Read more at Yahoo Finance: Renters use ‘rent now, pay later’ services to manage monthly payments, but fees raise concerns