Phantom Debt
$43.9 billion in 2023 — up from $33.4 billion the year before, and still largely outside the credit file
What is the current Phantom Debt reading?
Six large buy now, pay later providers lent $43.9 billion in 2023, the Consumer Financial Protection Bureau reported — up from $2.2 billion in 2019. Most pay-in-four loans never reach a credit bureau, so the standard measures of what households owe do not see them. Source: CFPB, The Buy Now, Pay Later Market.
Measurement basis: How much money six large buy now, pay later lenders — Affirm, Cash App Afterpay, Klarna, PayPal, Sezzle and Zip — lent out over a calendar year, in that year's own dollars, as reported by the CFPB for 2019 through 2023. It counts pay-in-four loans only: point-of-sale installment loans and credit card installment plans are not in it. It is a flow, the lending done during the year, not a balance anyone owes at a moment in time. The CFPB puts these six firms at roughly forty percent of the overall point-of-sale financing market in 2023 and says its sample is not necessarily representative of the whole buy now, pay later market, so this is a large slice of the market and not the market.
A $43.9 billion lending market has grown up almost entirely outside the traditional credit reporting system.
Six large buy now, pay later providers lent $43.9 billion in 2023, the CFPB reported. That is 20× the $2.2 billion the same kind of lending came to in 2019, when the market barely existed. What makes it different from other consumer credit is that most pay-in-four loans never reach a credit bureau, so the standard measures of what households owe do not see them.
The CFPB counted 53.6 million people borrowing this way in 2023. The Federal Reserve's most recent SHED survey put buy now, pay later use at 16% of adults, and slightly more than a quarter of users late on a payment. 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.
A year's lending is not a balance owed. The Richmond Fed estimates that what is outstanding at any one moment comes to roughly $3 billion — small beside the trillion-plus tracked by Plastic Ceiling. But the borrowing is concentrated among financially fragile households, the same population already showing stress in Falling Behind. An invisible layer of obligations on already-strained households is risk that lenders and regulators 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 |
|---|---|---|
| 2023 | $43.9B | +$10.5B |
| 2022 | $33.4B | +$7.9B |
| 2021 | $25.5B | +$16.6B |
| 2020 | $8.9B | +$6.7B |
| 2019 | $2.2B | — |
Frequently Asked Questions
How large is the Buy Now Pay Later market?
We don't publish a market total, because the available figures don't support one. What we track is what six large providers lent: $43.9 billion in 2023, up from $2.2 billion in 2019. The CFPB, which collects those figures, puts the six at roughly 40% of the point-of-sale financing market in 2023 and says its sample is not necessarily representative of the whole buy now, pay later market.
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 Federal Reserve's most recent SHED survey found that slightly more than one-fourth of BNPL users were late making a payment. 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 16% 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 buy now, pay later using the CFPB's own collection from six large lenders — Affirm, Cash App Afterpay, Klarna, PayPal, Sezzle and Zip — published in The Buy Now, Pay Later Market (December 2025), Appendix Table 5: dollars originated each calendar year from 2019 through 2023, each year in its own dollars. Additional context comes from the Board of Governors of the Federal Reserve System's annual SHED survey.
Quick poll
Is this affecting you or your household?
Discussion
Get the numbers when they move.
New data drops, indicator updates, and ADI score changes — delivered when it matters. No spam.
or Create an Account for full access
Loading comments…