The rise of buy now pay later (BNPL) platforms has given Americans another way to pay for goods and services. This payment method has grown in popularity thanks to an often interest-free model that many consumers have embraced over traditional credit cards, especially in the current rising interest rate environment. However, while BNPL serves as a convenience for many shoppers, it has also become associated with the risk of consumers biting off more than they can chew.

It has become the go-to payment method for many who have difficulty affording the basics, such as groceries. One Harvard researcher says that it reflects the desperation many consumers feel in this slow economy. Marshall Lux, a fellow at the Harvard Kennedy School told CNBC, “Once people start stretching out grocery payments, it shows the height of personal desperation.”

Americans have been battling rising prices for most of 2022, with inflation currently hovering above 8% despite an easing in fuel prices. As a result, consumers increasingly turn to BNPL services to pay for items they would otherwise use cash for.

For example, BNPL provider Zip revealed a 95% spike in consumers paying for grocery purchases through its installment arrangements. Klarna, another BNPL service, says over 50% of the most popular 100 purchases on its app are food or household items. Harvard’s Lux blames it on the current “economic climate,” saying that “Americans simply can’t afford to buy food.”

While BNPL solutions have been around for approximately a decade, their popularity took off during the pandemic. Financially savvy millennials and Gen Z people are credited with fueling much of the BNPL craze as a way to avoid credit card interest. These same younger generations are especially keen to use BNPL services to purchase household goods, even more than Americans 55 and up.

BNPL services are convenient for many, allowing them to purchase items they otherwise could not afford and pay for over time. Even Apple has gotten in on the craze, with plans for its upcoming iOS 16 iPhone operating system to include a BNPL feature. Users can use their devices to make interest-free purchases on everything from fuel to groceries and pay for them within six weeks.

While these installment loans often come without any interest, they do not proceed without a catch. The downside to BNPL systems is that it is still possible for consumers to find themselves in debt. Missed payments can result in penalties, fees, and negative marks on a person’s credit report.

This market segment lacks the maturity of the credit card space and therefore does not have the same regulatory controls for consumer protection. In most instances, one BNPL provider can approve a purchase without knowing the consumer is juggling multiple agreements at once, making it easy for shoppers to overextend themselves with the benefits of BNPL services.

The BNPL market was valued in the low billions of dollars in 2019 and is projected to soar 1,200% through 2024.