By Brianna Ndikum, SGJC Student News Network
During the 2020 pandemic, when schools shut down and many people were unable to work, Ike Chukwu Ihejirika, then 18, spent much of his time on his phone, scrolling through social media and browsing shopping sites. He looked at shoes, clothing and items on Amazon: things he wanted or thought he needed.
Without a steady income, his bank account remained stagnant, limiting his ability to make purchases. That changed when he came across an advertisement for Afterpay, a buy now, pay later (BNPL) service that allowed him to split a $100 purchase into four payments of $25.
“It was very dangly and sparkly… like I don’t have to pay this full amount right now,” Ihejirika said.
At first, the service felt like a solution. With a spending limit of $600, he suddenly had access to money he did not have upfront.
“I would do the buy now, pay later and spend the rest of the money… then the installment would come around and I’m trying to scrape for the money,” he said.
Over time, the payments became harder to manage. He began missing due dates, accumulating late fees and eventually one of his accounts was sent to collections. “You never really want anything to go to collections,” he said.
Ihejirika’s experience reflects a growing trend among young consumers using these services.
BNPL services like Afterpay, Klarna, and Affirm have rapidly grown in popularity, especially among Gen Z consumers. Marketed as interest-free and convenient, these services allow users to split purchases into smaller payments.
However, experts warn that the structure of these loans can encourage overspending and create confusion about debt.
How it all began
The concept of paying over time is not new. It has existed for decades under different names such as rent-to-own and layaway. These systems laid the foundation for modern installment-based purchasing.
Today’s BNPL systems are primarily digital, integrated into apps and online checkout systems. Klarna, one of the first major companies in this space, was founded in 2005 in Sweden before expanding into installment-based services and entering the United States in 2015.
BNPL gained attention between 2019 and 2021 and surged during the pandemic. According to the Consumer Financial Protection Bureau, BNPL loans grew by 970% during that time. This growth has continued beyond the pandemic, becoming more embedded in everyday spending habits, particularly among younger consumers, who quickly became one of the largest user groups for these services, according to The Financial Brand, a banking and financial industry research publication.
A target on Gen Z
Gen Z has been identified as one of the least financially literate generations. According to the TIAA Institute’s P-Fin Index, Gen Z respondents correctly answered only about 38% of financial literacy questions.
Unlike traditional credit cards, BNPL loans are not always reported to credit bureaus, leading many users to view them differently.
“It seems very low consequence… it just seems like free money,” Ihejirika said.
That perception can quickly lead to overspending and debt stacking. According to the Consumer Financial Protection Bureau, 63% of BNPL users have multiple loans at the same time.
“You make multiple payments and then suddenly owe a large amount all at once,” Ihejirika said.
Experts say this pattern is common and often underestimated.
“They do another one, and another one,” said Dr. Phyllis Keys, associate vice president for academic affairs and a former finance professor at Morgan State University. “They don’t think about the other consequences.”
As usage increases, so do the risks. According to LendingTree, about 40% of BNPL users have missed at least one payment.
What Gen Z says
To better understand how these trends appear among young consumers, I conducted a survey of 22 Gen Z respondents. Among them, 72.7% said they have used BNPL services. The most common purchases were clothing, followed by electronics and bills.
When asked why they used these services, 50% cited convenience, while 22.7% said they used them because they could not afford to pay the full price upfront.
The survey also revealed financial risk. About 31.8% of respondents said they had missed a payment, yet only 27.3% reported experiencing financial stress. This gap suggests that some users may not fully recognize the impact of missed payments.
Additionally, 72.7% said BNPL makes spending easier, and 81.8% described the services as both helpful and harmful.
These findings mirror experiences like Ihejirika’s, while also reflecting perspectives like Kevin Okechukwu, a college student who does not use BNPL services.
“I just don’t like things hovering over my head. I kind of like to get it done in one motion,” said Okechukwu.
Okechukwu said he prefers to avoid future financial obligations and uncertainty.
“You never know how things will look next month when the next payment’s due,” he said.
Still, he acknowledged that the services may work for some users.
“If you’re on top of your finances and on top of your priorities, then it’s definitely something that’s useful,” he said.
The bigger picture
Even for users who manage their payments carefully, broader economic conditions continue to shape financial behavior. Rising costs of living have made it harder for young consumers to save money.
“These days, everything costs so much, it’s hard to save,” Ihejirika said.
Experts say financial pressure, combined with the structure of BNPL services, influences spending habits.
Dr. Keys says many users focus on short-term affordability without considering long-term impact.
“They think they can handle it, but they are not thinking long term,” she said.
This short-term thinking can have lasting consequences. Missed payments and accumulated debt can negatively affect credit scores and limit future financial opportunities.
Recent reports indicate that BNPL services are increasingly being tied to credit reporting systems, meaning missed payments could have longer-term consequences than many users expect.
Over time, these financial patterns can impact larger goals such as qualifying for loans or purchasing a home.
Looking back, Ihejirika said his experience changed how he approaches spending.
“I’ve gotten better and stopped using it,” he said. “I would advise against it. It’s a slippery slope.”