Editing Buy Now, Pay Later (section)

==Why it is a problem==

===Lack of regulation===
Buy Now, Pay Later's short-term payment plans and lack of immediate interest make it possible for lenders to operate outside the laws and regulations of traditional credit card companies{{Citation needed}}. In most countries, credit is defined by predetermined criteria that many BNPL fintechs purposely avoid, allowing them to act unregulated on mass populations around the world.

===Ease of debt===
Many credit lenders offer soft credit checks and low interest rates to entice non-creditworthy consumers. While these practices do have some benefit, particularly for financially aware individuals seeking to improve credit, these enticements often bring in consumers who are more vulnerable. Buy Now, Pay Later lenders are especially egregious in advertising to vulnerable consumers, often advertising alongside necessary online purchases such as groceries and even rent and utilities. The lack of safeguards that come from hard credit checks and interest rates means that more consumers are accruing easily avoidable debt.

===No safeguards===
Credit card companies are legally obligated to report to the major credit bureaus such as Experian, TransUnion, and Equifax. Without reporting consumer information, BNPL lenders avoid common safeguards like spending limits, thus allowing consumers to accrue hundreds or even thousands of dollars in debt that otherwise wouldn't have been possible. This is particularly harmful because consumers tend to believe, and the lenders tend to advertise, that BNPL services are a safer option compared to traditional credit cards.

=== Data Harvesting ===
"BNPL lenders have access to the valuable payment histories of their customers. Some have used this collected data to create closed loop shopping apps with partner merchants, pushing specific brands and products, often geared toward younger audiences. As competitive forces pressure the merchant discount, lenders will need to find other sources of revenue to maintain growth and profitability. The Bureau would like to better understand practices around data collection, behavioral targeting, data monetization and the risks they may create for consumers"<ref name=":1" />.<!-- This is a direct quote from the CFPB page cited. Still needs to be re-worded/paraphrased and fit within wiki's voice -->