US Households Turn to Buy Now, Pay Later Loans for Basic Utilities

Federal data indicates that electricity costs have surged 18% since the start of President Trump’s second term, while the average price for a gallon of gas hit a record $4.06 in mid-August. In response to these financial pressures, apps like Flex, Zip, and Affirm have expanded their reach beyond retail, allowing users to finance broadband, water, and even rent payments. Recent polling from Data for Progress reveals that 46% of BNPL users have utilized these services for groceries, while 39% rely on them for utility bills.

Advocacy group Protect Borrowers warns that this shift masks a predatory cycle of debt. Their recent report highlights that many of these loans are laden with financing, late, and non-sufficient funds fees that can reach 25% of the purchase price. Despite the industry's rapid growth—with usage hitting $160 billion last year—analyst Jennifer Zhang is urging Congress to implement sweeping protections to curb deceptive pricing and protect vulnerable borrowers from long-term financial instability.