Buy now-Pay later option helps local businesses, but does it hurt consumers?

ODESSA, Texas (KMID/KPEJ) - Buy Now Pay Later, or BNPL, has seen an increase in users throughout the years, most notably during the Covid-19 pandemic. The payment method is mostly used online but has also been seen in-store as well.

Using BNPL, a shopper will make a purchase through a loaning app such as Klarna, After Pay, or Affirm which will take care of the transaction. Afterwards, a payment plan is given to the shopper, usually with four installments, and in most cases, that comes with zero interest.

For local businesses, they see the BNPL method as a way that grows their numbers.

"People come in and ask if we do payments. We say we don't offer payments, but we have these platforms that do. It's Affirm shop pay, Afterpay, Paypal pay. It helps out to generate more sales and stuff," said Concrete Gallery Owner Ejay Longoria.

Although it may sound like a good idea, BNPL also has some risk to it. For example, it can encourage overspending due to pushing payment down the line.

As for your credit score right now, it does not affect if you make payments on time, but some BNPL companies can report late payments. There are future plans towards heading into this direction with the credit bureau.

"We will begin to see lenders say hey we're reporting the data to the credit bureaus to help you build credit and they will be all kinds of information," said Trans Union SVP Liz Pagel. "We want to make sure we do this carefu...