Buy now, pay later: A soft debt trap for the middle class

“My phone needs to be updated; it keeps getting stuck,” I said to my son one evening, expecting sympathy rather than advice. He looked at the screen for a moment and replied calmly, “Father, this phone is very old. You should buy a new one.” I hesitated. “Not now. I need to check my budget before making that decision.” Without thinking twice, he smiled and said, “You don’t have to worry. Just use Buy Now, Pay Later.”
That short conversation reflects a profound shift in modern financial behavior. What once required saving and planning is now solved instantly through installment consumption. Buy Now, Pay Later (BNPL) is a flexible, interest-free alternative to credit cards that allows consumers to purchase immediately and repay in small portions over time. What began as a convenient checkout option has evolved into a global financial ecosystem embedded across retail platforms, mobile apps, and digital wallets. Beneath its friendly language and smooth user experience lies a deeper structural issue—one that mirrors the logic of modern capitalism and places disproportionate pressure on the middle class.
Historically, installment purchasing is not new. Department stores in the early twentieth century introduced deferred payment schemes to help workers afford household goods. The modern BNPL model, however, differs in speed, scale, and psychological design. Fintech platforms approve purchases within seconds, remove traditional credit checks, and frame debt as harmless flexibility. Behavioural economists, particularly Richard Thaler, explain this through “present bias”—the tendency to prioritise immediate pleasure over future consequences. BNPL exploits this bias perfectly by separating consumption from payment, allowing desire to override financial discipline.
From an economic theory perspective, BNPL fits seamlessly into consumer-driven capitalism. Keynesian economics emphasizes the role of consumption in sustaining economic growth, but in today’s economy wages often fail to rise alongside living costs. To maintain spending levels, financial systems increasingly depend on household debt. Economist Hyman Minsky warned that easy credit breeds financial instability as individuals are encouraged to live beyond sustainable income levels.
BNPL represents a new micro-debt mechanism, spreading small obligations across millions of consumers while collectively creating significant financial vulnerability.
Notably, BNPL does not primarily target the wealthy. High-income individuals generally possess savings, liquidity, and traditional credit access. Instead, the system is designed for middle-class households facing rising rent, education costs, healthcare expenses, and inflationary pressure. BNPL offers short-term comfort by converting large purchases into manageable installments, but this relief quietly accumulates into monthly financial strain.
What makes BNPL particularly dangerous is its invisibility. Unlike conventional loans, it rarely feels like borrowing. Consumers may hold multiple BNPL commitments across different platforms—each appearing small, yet together consuming a large share of income. By month’s end, bank statements reveal continuous deductions before essential expenses are even addressed. This reflects Marxist critiques of capitalism in which financial mechanisms extract value systematically from workers’ wages. Earnings circulate briefly in households before flowing steadily back to financial institutions.
Academic research increasingly associates BNPL usage with declining financial well-being. Studies show higher rates of missed payments, overdrafts, and budgeting difficulties among users. The framing of affordability is misleading. RO 600 purchase feels harmless when divided into six RO 100 payments, yet combined with other installments it can destabilize household cash flow. Consumption becomes driven not by income capacity but by psychological affordability.
Sociologically, BNPL reinforces what Thorstein Veblen described as conspicuous consumption—the pressure to maintain social status through visible spending. Social media intensifies this urge, promoting curated lifestyles that appear effortless and luxurious. BNPL becomes the bridge between aspiration and reality, allowing consumers to mimic wealth while quietly accumulating debt.
The middle class suffers most because it exists in a fragile economic space—earning too much for government assistance yet too little to absorb recurring financial shocks. Unlike the wealthy, who use debt strategically for investments, middle-class households borrow for depreciating goods such as electronics, fashion, and lifestyle items. This creates “bad debt,” which generates no long-term financial security.
Furthermore, BNPL reshapes financial thinking itself. Instead of asking whether a purchase is affordable, consumers ask whether the monthly payment is manageable. This payment-based mindset has long driven credit expansion in mortgages and car loans, contributing to previous household debt crises. BNPL simply miniaturizes this dangerous logic for everyday consumption.
Ironically, within capitalism, BNPL is not a flaw—it is a success. It boosts retail sales, increases transaction volumes, and sustains economic demand despite income stagnation. Retailers gain higher conversions, fintech firms earn fees and penalties, and the broader economy enjoys short-term consumption growth. The hidden cost is transferred to households in the form of stress, dependency, and declining financial resilience.
Buy Now, Pay Later is far more than a convenient payment option. It is a structural tool of modern capitalism that transforms financial vulnerability into profit. By targeting the middle class, it normalises debt-driven living while weakening long-term financial stability. While it may ease today’s purchasing pressure, it quietly builds tomorrow’s financial crisis.