When shopping online, have you noticed a new payment option that allows you to pay over time? These options are offered by companies such as Paypal Credit/Bill Me Later, AfterPay, Affirm, Klarna, FuturePay, and QuadPay.

BNPL services can be helpful but only if a purchase fits your budget.

Called buy now, pay later (BNPL), these payment services are short interest-free loans that are paid off in equal installments. Payments are typically made weekly, every two weeks, or monthly. You can set up an account during checkout or through an app.

Pros and Cons

So, should you use them? Let's look at the pros and cons.


  • Convenient and easy to use.
  • No fees if you make your payments on time.
  • Link your payments to your debit card, bank account, and in some instances a credit card.
  • May also be available at certain retailers offline.


  • May tempt you to splurge or make impulse purchases.

  • Missing a payment or not having sufficient funds in your account could trigger fees and penalties. You may also have to pay interest for the rest of the payment period.

  • Can have a negative impact on your credit score because on time payments aren't reported to the credit bureaus but missed payments and defaults are reported.

  • Can be hard to receive a refund if the product didn't arrive or was defective since you have to work with both the retailer and the BNPL service.

  • Interest rates are high and can be higher than credit card interest rates.

  • BNPL services lack the oversight that credit cards and other types of loans have.

If you are interested in using a BNPL service, take the time to read the FAQs, terms, conditions, and fine print.

Consider the Following

Before selecting the BNPL service, consider the following.

  • Ask yourself these questions: Do you need it or just want it? Will the payment fit in your budget? Do you have the money available especially if the payment is weekly or every 2 weeks?

  • Are you willing to set up automatic payments so that you won't miss a payment. If so, make sure that the money is available on the payment dates. If not, add it to your budget to remember to pay it.

Bottom line: BNPL services can be helpful but only if a purchase fits your budget.