Hidden Debt: How 'Buy Now, Pay Later' Is Clouding America's Economic Outlook

Wells Fargo senior economist Tim Quinlan is raising alarms over “phantom debt,” a growing concern stemming from the popularity of “Buy Now, Pay Later” (BNPL) platforms like Affirm Holdings, Klarna, and Block Inc.’s Afterpay. These platforms, which let consumers split purchases into installments, do not report these transactions to credit agencies. This lack of transparency is troubling for market analysts and economists as it obscures a complete picture of American financial health—a critical element for predictions and planning by central banks, regional lenders, and businesses. This hidden debt layer emerges alongside increasing delinquencies in auto loans and credit cards, suggesting potential cracks in consumer financial stability amidst persistent inflation.