Phantom Debt: The Dangerous Consequences of Buy Now, Pay Later Loans

Since 2019, buy now, pay later loans have experienced a sharp rise of nearly 1,100%. This increase has led to the accumulation of “phantom debt” as the exact amount and repayment status of these loans are unclear. According to Juniper Research, these types of transactions could reach nearly $700 billion by 2028.

The concept of phantom debt poses a significant risk to the economy, introducing uncertainty and potential instability into the financial system. As more consumers take advantage of buy now, pay later options, the overall level of debt in the economy could rise, potentially leading to financial strain for individuals and businesses alike.

It is crucial for consumers to be informed about the risks associated with buy now, pay later loans and to carefully consider their financial situation before taking on additional debt. By making smart financial choices, individuals can help mitigate the potential negative impact of phantom debt on both their own finances and the broader economy.