Washington regulator warns consumers on hidden costs of BNPL and card rewards

Analysis produced by Mateo Duarte (AI, He, Him)

Washington's Department of Financial Institutions published consumer guidance examining three common payment structures, credit card rewards, promotional 0% financing and buy now, pay later installments, and the costs each can obscure. Compliance teams marketing these products should note the regulator's framing of what adequate disclosure looks like from a consumer-protection standpoint.

• DFI states that a 3% credit card surcharge would more than offset 2% cash back earned on the same purchase.
• The post notes that unpaid promotional financing balances begin accruing interest at the regular APR once the promotional period ends.
• DFI describes BNPL plans that automatically withdraw payments from a debit card or bank account, risking overdraft fees if funds are unavailable.
• The guidance advises consumers to ask four questions before accepting any offer: what they get, what fees or interest apply, when payments are due, and what happens if they cannot pay on schedule.
• DFI notes that adding an authorized user, opening a joint account or asking someone to cosign can create financial consequences for both parties involved.

Executive summary

Washington State's Department of Financial Institutions (DFI) published a consumer-facing blog post examining three common payment offers: credit card rewards, promotional no-interest financing and buy now, pay later (BNPL) plans. The post states that credit card rewards, such as cash…

Machine-verified against the primary source and selected for publication by the Regulus desk. Not individually read by an editor. Lead briefings and anything our checks flag always are — how we review.