BNPL lenders expand into essential household utilities and medical costs

Buy Now, Pay Later (BNPL) lenders are significantly expanding their services to cover essential household expenses as cost-of-living pressures rise. While once used primarily for discretionary retail purchases, installment financing is increasingly being utilized for necessities such as electricity, water, broadband, groceries, rent, and medical care.

Data indicates a substantial shift in consumer behavior. According to a Data for Progress survey, 46% of BNPL customers have used the service for groceries, 42% for medical or dental expenses, and 39% for utility bills. Federal Reserve research noted that Americans spent approximately $160 billion through installment loan programs last year, nearly doubling the amount spent in 2023.

Fintech platforms including Affirm, Flex, and Zip are facilitating these payments for utilities and housing. In the healthcare sector, a trend often called “Care Now, Pay Later” has emerged, with point-of-sale financing becoming common in dental clinics, vision centers, and urgent care facilities to help patients manage high out-of-pocket costs. While these services provide immediate cash-flow relief, financial analysts and advocacy groups warn that managing multiple micro-loans can lead to cumulative repayment risks for vulnerable households.