People are turning to BNPL loans to pay for rent, food and other necessities

September 2, 2026 / 5:05 PM EDT / CBS News

"Buy now, pay later" loans were originally promoted as a way to help consumers afford small purchases, such as electronics and clothing. Now, financial firms are also pushing the loans as a means for people to cover essential expenses, such as rent, groceries, electricity bills and even medical costs.

Consumer advocates warn that using BNPL loans for daily necessities and other critical expenses is risky, noting that lenders sometimes obscure the potential costs of these short-term loans. A recent poll from Protect Borrowers, a nonprofit advocacy group that investigates financial abuses, found that many BNPL users report using the loans for essentials, including for rental or housing costs.

Ariel Nelson, senior attorney at the National Consumer Law Center, a nonprofit advocacy group that supports economic justice for low-income people, said the growing usage of BNPL loans for rent and other necessities underlines how many Americans, depleted in recent years by high inflation, are struggling with the cost of living.

"The most helpful thing about them is what they reveal about the state of affordability — or unaffordability — in our country, which is that people are struggling to pay rent…

Original source: https://www.cbsnews.com/moneywatch/