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76% of buy now, pay later users said it helped improve their financial situation but beware of risks: survey

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One way to juggle BNPL accounts is by keeping track of them, according to a recent Achieve survey. (iStock)

A growing number of consumers who use buy now, pay later (BNPL) services and are attracted to their ease of access, but they are at risk of becoming overextended, according to a recent survey. 

Over a third (34%) of respondents said they liked BNPL services because they allowed them to pay for purchases over time without paying interest, while 22% liked the option because it was easier to access than credit cards, according to the Achieve survey. Additionally, 76% said BNPL helped them improve their overall financial situation.

BNPL providers partner with retailers to allow shoppers to split the cost of their online purchases into multiple installments at checkout. Part of the appeal is that the installment payments, which typically begin within a few weeks of the purchase, are interest-free. Plus, the payment option requires no credit check or down payment, as in the case of credit cards or layaway.  

However, the survey said that BNPL is sometimes used by consumers with poor credit histories who are already debt-stressed. Moreover, 78% of respondents said that it is easy to get overextended using BNPL.

“Buy now, pay later isn’t an inherently flawed financial product,” Achieve Co-Founder and Co-CEO Brad Stroh said. “But like any form of credit, consumers must use it responsibly and only borrow what they can repay. Lenders must also be responsible and intentional about their borrowers and the potential for harm inherent in the BNPL product.”

BNPL is just one alternative to credit cards. If you need help funding a large purchase, a personal loan could be a good option for you. You can visit Credible to find your personalized interest rate without affecting your credit score.

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BNPL leads to better financial outcomes than credit cards 

Missed BNPL payments can result in late fees and other penalties. Financially overextended consumers who used BNPL products showed more signs of debt stress—such as higher debt levels and lower credit scores—than those without, according to the survey. However, only 16% of respondents said they’ve incurred a late fee for missing a BNPL payment, and 20% said they’ve been charged interest on a BNPL transaction.

Additionally, a separate survey by BNPL provider Klarna said that consumers who relied on BNPL had better outcomes than traditional credit card users. Roughly 96% of Klarna’s U.S. BNPL customers paid early or on time, outperforming 41% of credit card users revolving monthly. In 2023, utilizing Klarna’s interest-free Pay in 4 option, 31% of customers paid bills early, 65% paid on time, and only 4% incurred late fees. Conversely, 41% of American credit card users carry month-to-month debt.

“We still see too many of the traditional banks and credit card companies pushing products on consumers with exorbitant interest rates, hidden fees, and revolving debt,” Klarna Chief Commercial Officer David Sykes said. “It is very clear that the traditional credit card model does not work in the favor of the vast majority of customers.”

If you have taken on debt through buy now, pay later and need help paying it down, a personal loan could help. Visit Credible to compare multiple personal loan lenders at once and choose the one with the best interest rate for you.

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Three ways to effectively manage BNPL debt

More than half (56%) of the respondents in the Achieve survey said that keeping track of multiple BNPL transactions takes a lot of work. Keeping a running list of all outstanding BNPL transactions is one way to get ahead of managing your debt. 

Achieve recommends that consumers note each transaction, the name of the BNPL provider, the number of payments remaining, the payment amount and how payments are made. Consumers should also consider BNPL products like any other form of credit, spend within their limit and have a repayment plan in mind before they make large purchases. They should also opt for autopay to avoid late fees for missed payments. 

“Whenever possible, pay from a checking account rather than a credit card to avoid incurring interest charges for these purchases later on, just make sure you always have enough money in your account to cover the monthly payment to avoid overdrafting,” Achieve said.

If you are looking for alternative forms of credit to help fund a large purchase, you could consider using a personal loan. Visit Credible to make sure you’re getting the best rate and lender for your needs.

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Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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Tariffs may raise much less than White House projects, economists say

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President Donald Trump speaks before signing executive orders in the Oval Office on March 6, 2025.

Alex Wong | Getty Images

President Donald Trump says that tariffs will make the U.S. “rich.” But those riches will likely be far less than the White House expects, economists said.

The ultimate sum could have big ramifications for the U.S. economy, the nation’s debt and legislative negotiations over a tax-cut package, economists said.

White House trade adviser Peter Navarro on Sunday estimated tariffs would raise about $600 billion a year and $6 trillion over a decade. Auto tariffs would add another $100 billion a year, he said on “Fox News Sunday.”

Navarro made the projection as the U.S. plans to announce more tariffs against U.S. trading partners on Wednesday.

Economists expect the Trump administration’s tariff policy would generate a much lower amount of revenue than Navarro claims. Some project the total revenue would be less than half.

Roughly $600 billion to $700 billion a year “is not even in the realm of possibility,” said Mark Zandi, chief economist at Moody’s. “If you get to $100 billion to $200 billion, you’ll be pretty lucky.”

The White House declined to respond to a request for comment from CNBC about tariff revenue.

The ‘mental math’ behind tariff revenue

There are big question marks over the scope of the tariffs, including details like amount, duration, and products and countries affected — all of which have a significant bearing on the revenue total.

The White House is considering a 20% tariff on most imports, The Washington Post reported on Tuesday. President Trump floated this idea on the campaign trail. The Trump administration may ultimately opt for a different policy, like country-by-country tariffs based on each nation’s respective trade and non-trade barriers.

But a 20% tariff rate seems to align with Navarro’s revenue projections, economists said.

The U.S. imported about $3.3 trillion of goods in 2024. Applying a 20% tariff rate to all these imports would yield about $660 billion of annual revenue.

“That is almost certainly the mental math Peter Navarro is doing — and that mental math skips some crucial steps,” said Ernie Tedeschi, director of economics at the Yale Budget Lab and former chief economist at the White House Council of Economic Advisers during the Biden administration.

Trade advisor to U.S. President Donald Trump Peter Navarro speaks to press outside of the White House on March 12, 2025 in Washington, DC. 

Kayla Bartkowski | Getty Images

That’s because an accurate revenue estimate must account for the many economic impacts of tariffs in the U.S. and around the world, economists said. Those effects combine to reduce revenue, they said.

A 20% broad tariff would raise about $250 billion a year (or $2.5 trillion over a decade) when taking those effects into account, according to Tedeschi, citing a Yale Budget Lab analysis published Monday.  

There are ways to raise larger sums — but they would involve higher tariff rates, economists said. For example, a 50% across-the-board tariff would raise about $780 billion per year, according to economists at the Peterson Institute for International Economics.

Even that is an optimistic assessment: It doesn’t account for lower U.S. economic growth due to retaliation or the negative growth effects from the tariffs themselves, they wrote.

Why revenue would be lower than expected

Tariffs generally raise prices for consumers. A 20% broad tariff would cost the average consumer $3,400 to $4,200 a year, according to the Yale Budget Lab.

Consumers would naturally buy fewer imported goods if they cost more, economists said. Lower demand means fewer imports and less tariff revenue from those imports, they said.

Tariffs are also expected to trigger “reduced economic activity,” said Robert McClelland, senior fellow at the Urban-Brookings Tax Policy Center.

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For example, U.S. companies that don’t pass tariff costs on to consumers via higher prices would likely see profits suffer (and their income taxes fall), economists said. Consumers might pull back on spending, further denting company profits and tax revenues, economists said. Companies that take a financial hit might lay off workers, they said.

Foreign nations are also expected to retaliate with their own tariffs on U.S. products, which would hurt companies that export products abroad. Other nations may experience an economic downturn, further reducing demand for U.S. products.

Tariffs could be a major rewiring of the domestic and global economy, says Mohamed El-Erian

“If you get a 20% tariff rate, you’re going to get a rip-roaring recession, and that will undermine your fiscal situation,” Zandi said.

There’s also likely to be a certain level of non-compliance with tariff policy, and carve-outs for certain countries, industries or products, economists said. For instance, when the White House levied tariffs on China in February, it indefinitely exempted “de minimis” imports valued at $800 or less.

The Trump administration might also funnel some tariff revenue to paying certain parties aggrieved by a trade war, economists said.

President Trump did that in his first term: The government sent $61 billion in “relief” payments to American farmers who faced retaliatory tariffs, which was nearly all (92%) of the tariff revenue on Chinese goods from 2018 to 2020, according to the Council on Foreign Relations.

The tariffs will also likely have a short life span, diluting their potential revenue impact, economists said. They’re being issued by executive order and could be undone easily, whether by President Trump or a future president, they said.

“There’s zero probability these tariffs will last for 10 years,” Zandi said. “If they last until next year I’d be very surprised.”

Why this matters

The Trump administration has signaled that tariffs “will be one of the top-tier ways they’ll try to offset the cost” of passing a package of tax cuts, Tedeschi said.

Extending a 2017 tax cut law signed by President Trump would cost $4.5 trillion over a decade, according to the Tax Foundation. Trump has also called for other tax breaks like no taxes on tips, overtime pay or Social Security benefits, and a tax deduction for auto loan interest for American made cars.

If tariffs don’t cover the full cost of such a package, then Republican lawmakers would have to find cuts elsewhere or increase the nation’s debt, economists said.

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Investors hope April 2 could bring some tariff clarity and relief. That may not happen

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Cliff Asness’s AQR multi-strategy hedge fund returns 9% in the first quarter during tough conditions

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Cliff Asness.

Chris Goodney | Bloomberg | Getty Images

AQR Capital Management’s multistrategy hedge fund beat the market with a 9% rally in the first quarter as Wall Street grappled with extreme volatility amid President Donald Trump’s uncertain tariff policy.

The Apex strategy from Cliff Asness’ firm, which combines stocks, macro and arbitrage trades and has $3 billion in assets under management, gained 3.4% in March, boosting its first-quarter performance, according to a person familiar with AQR’s returns who asked to be anonymous as the information is private.

AQR’s Delphi Long-Short Equity Strategy gained 9.7% in the first quarter, while its alternative trend-following offering Helix returned 3%, the person said.

AQR, whose assets under management reached $128 billion at the end of March, declined to comment.

The stock market just wrapped up a tumultuous quarter as Trump’s aggressive tariffs raised concerns about an severe economic slowdown and a re-acceleration of inflation. The S&P 500 dipped into correction territory in March after hitting a record in February.

For the quarter, the equity benchmark was down 4.6%, snapping a five-quarter win streak. The tech-heavy Nasdaq Composite lost 10.4% in the quarter, which would mark its biggest quarterly pullback since a 22.4% plunge in the second quarter of 2022.

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