Warns buy now pay later risks
- CTV News aired an April 22 explainer with money expert Robyn Thompson warning that buy now, pay later plans can turn small, interest-free instalments into scattered debt when shoppers stack too many purchases. - Canadian guidance says these plans are still credit agreements: borrowers should check payment schedules, fees, interest on longer-term plans, and whether automatic withdrawals could trigger missed-payment charges or overdrafts. - Regulators are paying closer attention as the market grows and debt concerns spread among younger borrowers. (canada.ca)
Buy now, pay later plans can look like four small payments, but they are still a form of borrowing. CTV News aired an April 22 segment with money expert Robyn Thompson warning that the convenience can turn into “scattered debt” and unexpected strain. (ctvnews.ca) These services let shoppers take home a purchase now and repay it over time, often in equal instalments. The Financial Consumer Agency of Canada says the agreement usually spells out the purchase amount, payment frequency, number of payments, fees and, in some cases, interest. (canada.ca) The pitch is usually simple: no large upfront payment, and some short plans advertise no interest if every instalment is made on time. CBC reported that Klarna’s Pay in 4 product in Canada splits a purchase into four interest-free payments, while late payments can still bring extra charges. (cbc.ca) The risk starts when one purchase becomes several. Thompson told CTV that the ease and flexibility of buy now, pay later can leave people juggling multiple repayment dates across different apps and merchants. (ctvnews.ca) Canada’s consumer agency tells borrowers to check whether the plan is an equal-payment loan or a deferred-payment loan, because the repayment rules are different. It also tells shoppers to ask about fees, interest, due dates and what happens if a pre-authorized payment fails. (canada.ca) That matters most when household budgets are already tight. CBC reported in December 2025 that the Credit Counselling Society served more Canadians aged 18 to 34 in 2025 than at any earlier point in its history, and counsellors said buy now, pay later plans were adding to debt stress for some younger clients. (cbc.ca) Canadian researchers have also found younger users are a core market for these products. CBC’s June 2025 reporting cited Laurentian University associate professor Kamran Eshghi, who said buy now, pay later providers often appeal to younger consumers with limited credit history. (cbc.ca) U.S. regulators are watching the sector closely too. The Consumer Financial Protection Bureau said in a December 2025 market report that buy now, pay later lending expanded between 2019 and 2023, and in a January 2025 report it said users of these loans often held more unsecured debt than non-users. (consumerfinance.gov 1) (consumerfinance.gov 2) For shoppers, the warning is narrower than “never use it.” The caution from CTV’s April explainer and federal guidance is to treat the instalment plan like any other loan: know the schedule, know the fees, and know whether the purchase still fits your budget before you click. (ctvnews.ca) (canada.ca)
