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Buy Now, Pay Later (BNPL) services like Klarna and Affirm are gaining popularity, especially among young adults and those with poor credit. While offering convenient payment installments, concerns exist about their potential for debt and lack of initial regulation. The CFPB initially classified BNPL as credit cards, requiring compliance with the Truth in Lending Act, but recent changes have reversed this. Experts link the rise of BNPL to the "millennial lifestyle subsidy," where tech companies initially offered cheaper services, but rising prices now necessitate BNPL for affordability. The long-term consequences and who ultimately bears the cost remain uncertain.

Prepared by Christopher Adams and reviewed by editorial team.