Phantom Debt
Up from $54.6B a year ago, invisible to lenders and credit scores
What is the current Phantom Debt?
Buy Now Pay Later originations among the six largest lenders reached an estimated $65.3B in 2025, according to Richmond Fed projections based on CFPB data — nearly 30 times the $2.2 billion originated in 2019. Most BNPL pay-in-four loans remain invisible to credit bureaus, meaning traditional measures of household debt systematically undercount what families actually owe. Source: Richmond Fed / CFPB (2025).
A $65.3B lending market has grown up almost entirely outside the traditional credit reporting system.
Buy Now Pay Later originations among the six largest lenders reached an estimated $65.3B in 2025, according to Richmond Fed projections based on CFPB data. That's 29.7× the $2.2 billion originated in 2019, when the market barely existed. The growth is extraordinary. What makes BNPL different from other consumer credit is that most pay-in-four loans remain invisible to credit bureaus, meaning traditional measures of household debt systematically undercount what families actually owe.
The CFPB found 53.6 million Americans used BNPL in 2023, and usage has continued climbing. The Fed's own 2024 SHED survey found 15% of adults had used BNPL, with nearly 1 in 4 users paying late — up sharply from the prior year. The $400 Test helps explain why. When more than a third of adults can't cover a $400 emergency, splitting a $200 purchase into four payments becomes a necessity rather than a convenience.
The outstanding balance in the series is estimated at only a few billion — small compared to the trillion-plus tracked by Plastic Ceiling. But BNPL use is concentrated among financially fragile borrowers, the same population already showing stress in Falling Behind. Adding an invisible layer of obligations to already-strained households creates risk that lenders and regulators literally cannot see.
Explore Further
Is this happening to you?
Are you using buy-now-pay-later to spread out purchases you used to pay for upfront?
How has Phantom Debt changed over time?
Most affected counties
Counties with the highest safety net and buffer scores in the County Distress Index.
Explore all 3,144 counties →| Period | Value | YoY Change |
|---|---|---|
| 2025 | $65.3B | +$10.7B |
| 2024 | $54.6B | +$9.4B |
| 2023 | $45.2B | — |
| 2021 | $24.2B | — |
| 2019 | $2.2B | — |
Frequently Asked Questions
How large is the Buy Now Pay Later market?
BNPL originations reached an estimated $65.3B in 2025 among the six largest lenders, according to Richmond Fed projections based on CFPB data. This is many multiples of the $2.2 billion the same lenders originated in 2019.
Why is BNPL called 'phantom debt'?
Most BNPL pay-in-four loans are not reported to credit bureaus, meaning they do not appear on credit reports or factor into credit scores. This makes BNPL obligations invisible to traditional measures of household debt stress.
What is the BNPL delinquency rate?
The Fed's 2024 SHED survey found that nearly 1 in 4 BNPL users (24%) reported paying late — up sharply from 18% the prior year. Because most BNPL delinquencies are not reported to credit bureaus, they do not appear in standard delinquency data.
Who uses Buy Now Pay Later?
BNPL use is concentrated among financially fragile borrowers. The Fed's SHED survey found that 15% of all adults had used BNPL, but usage is much higher among those who cannot cover a $400 emergency. For those households, BNPL functions as essential cash-flow management — a way to pay for groceries or utilities by stretching obligations across pay cycles.
Where does the BNPL data come from?
American Default Research tracks BNPL using Richmond Fed projections based on CFPB regulatory data from the six largest BNPL lenders. Additional data comes from the Fed's annual SHED survey, which asks households about BNPL use.
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