The use of “buy now, pay later” credit spiked during the holiday shopping season, retail numbers show. But as easy as it is for shoppers to use the service, some may now find it difficult to make the payments or manage returns.

The services, which are also known as “pay in four” because borrowers often repay the loan in four installments over several weeks, are offered by companies like Afterpay, Affirm, Klarna, PayPal and Zip. More than one-quarter of Americans have used the option to pay for items such as clothing, electronics and appliances, Consumer Reports found in a summer survey, up from 18% earlier in the year.

During “cyber week” — the shopping period that includes Thanksgiving and the Friday and Monday after the holiday — pay-later orders rose 85% from the prior week, according to Adobe Analytics. The National Retail Federation says almost half of merchants offer at least one pay-later option online.

The lightly regulated services have caught on because shoppers can quickly get approved for a loan at the point of sale with a cursory credit check. So people who can’t get a traditional credit card may qualify. Borrowers typically pay no interest or fees if they repay on time. And unlike old-time layaway plans, in which customers paid in full before receiving an item, pay-later customers get their merchandise right away. Most people who have used the services say they are satisfied, Consumer Reports found.

Yet there is rising concern among regulators and consumer advocates that the loans lack important protections and that borrowers may be getting in over their heads. Some Americans who have been hit hard by inflation are using the services to pay for groceries and other necessities. Borrowers may have trouble managing multiple loans, Consumer Reports found, and more than one-quarter of people who have used a pay-later loan reported having at least one problem, like being overcharged or trouble getting refunds.

Late or missed payments may add on fees of about $7 per payment on an average loan of $135, the Consumer Financial Protection Bureau said in a recent report. And because most services automatically bill installments to your debit card, you may get an overdraft fee from your bank — often about $30 — if your balance is too low when the payment is withdrawn.

“The drawbacks outweigh the benefits,” said Ed Mierzwinski, senior director of the federal consumer program at U.S. PIRG, a consumer advocacy group.

Penny Lee, CEO of the Financial Technology Association, a lobbying group for financial technology companies including several pay-later providers, defended the pay-later services in an email, saying they provide flexibility so customers can fit purchases into their budget cycles. “Using a BNPL product is transparent,” she said, “as consumers see the exact amount of their payments, the schedule for completing payments and the fees they might incur if they miss a payment, with some companies not charging any late fees at all.” (Affirm and PayPal are among the lenders that don’t charge late fees.)

The consumer bureau, however, has cautioned consumers on the risks of loan “stacking,” or taking out several loans at the same time. “Because you can make multiple buy now, pay later purchases through different services or merchants in a short time, it’s easy to end up with more debt than you intended, or can afford,” the bureau has advised.

That can land some borrowers in trouble. In 2021, 3.8% of borrowers in a consumer bureau study of five pay-later providers had a loan that was “charged off” as bad debt, up from 2.9% in 2020, and the upward trend continued through the first half of this year.

That has led consumer advocates to call for pay-later loans to be regulated in the same way as traditional credit cards, with standard disclosures and protections, such as the right to temporarily withhold payment while a disputed charge is investigated. “That does not exist with buy now, pay later,” said Rachel Gittleman, financial services outreach manager for the Consumer Federation of America.