Expert Warns of Credit 'Catastrophe' from Buy Now, Pay Later in 2025

The Rise of Buy Now, Pay Later (BNPL)

• 💡 Micah Smith, President of Micah Abigail LLC, warns about the increasing use of Buy Now, Pay Later (BNPL) services.
• ⚠️ A primary concern is the expansion of BNPL to non-essential items like food delivery, which he argues is not a good money habit.

Potential Credit Score Catastrophe

• 🎯 Smith highlights that BNPL data will soon be included in credit reports, and negative reporting could lead to a "credit catastrophe."
• ⛓️ He emphasizes that the borrower is slave to the lender, and financing non-essential items can lead to being enslaved by debt.
• 📈 The impact of defaulting on BNPL payments can have a cyclical and compound negative effect on one's credit report.

Financial Security and Prevention

• 🔑 Financial security is built on good money habits, and financing everyday consumables like food delivery is contrary to this.
• 🚫 Smith urges individuals to not finance purchases they cannot afford, imploring them to find alternative solutions.
• ⏳ A single missed payment on a BNPL plan can remain on a credit report for up to seven years, underscoring the importance of timely payments.
• 🛠️ The advice given is to set up autopay for all BNPL obligations, following the principle that "an ounce of prevention is worth more than a pound of cure."