Banks See Risk in Frequent Use of BNPL

Until recently, Buy-Now-Pay-Later (BNPL) loans have not been reported to credit bureaus, leading to gaps in understanding how this product informs consumer credit outcomes. As BNPL products begin to be incorporated into credit scores, many banks state that frequent use of BNPL products is seen as risky, with some banks banning consumers from using their credit cards to pay off BNPL installments. However, BNPL advocates highlighted that default rates are 2 percent lower than traditional credit cards. 

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