Buy Now, Pay Later (BNPL) programs have become a popular way to shop — especially for online purchases. With services like Afterpay, Klarna, and Affirm, shoppers can break up the cost of a purchase into smaller, interest-free payments over time. On the surface, it’s an appealing option. But like any financial tool, the key to success is using it wisely.
Here’s how BNPL can be a useful tool — and where to be cautious.
1. It Can Be A Helpful Budgeting Tool
One of the biggest perks of BNPL is the ability to spread out the cost of a necessary purchase and, in some cases, help you avoid upfront costs like interest charges. If you’ve budgeted for a big-ticket item like a pair of winter boots or a new laptop, but don’t want to take a large hit to your account all at once, BNPL can help smooth out your cash flow.
This only works, though, if you’re planning ahead. If you're using BNPL because you don’t have the money at all, it could set you up for a cycle of debt.
Tip: Before choosing BNPL, ask yourself: “Do I have a plan to cover these payments in the coming weeks?” If the answer is no, it might be worth holding off.
2. Don’t Overextend Yourself
It’s easy to fall into the trap of opening multiple BNPL payment plans at once. After all, the payments look small — $10 here, $25 there. But add up five or six plans, and suddenly you’ve committed to hundreds of dollars in recurring payments across different platforms, each with their own timelines and due dates.
Missing a payment can mean fees, potential credit score impact, or difficulty tracking your finances.
Tip: Keep your BNPL usage to one or two open plans at a time and always know when each payment is due.
3. Use It For Practical Purchases, Not Daily Habits
BNPL can be useful for spreading out the cost of essentials like furniture, appliances, or a new pair of work shoes. But using it for everyday expenses like takeout, coffee, or impulse buys? That’s a slippery slope.
When you start splitting small purchases into payments, it can be easy to lose track of how much you’re really spending. And if you’re using BNPL for things like food or entertainment, you may be borrowing for things that won’t even last until your payments are complete.
Tip: Ask yourself, “Will I still be using this item when the last payment is due?” If the answer is no, skip the BNPL.
Bottom Line
BNPL programs can be a smart, flexible way to manage your money if you use them intentionally. Stick to one or two open plans, use it for practical needs, and make sure it fits your budget. Otherwise, it could be less of a helpful tool and more of a financial burden.
Use BNPL the right way, and it can help you stay on top of your spending — not the other way around.
To learn more about BNPL programs, listen to BCU’s Life. Money. You.® podcast episode, The Rise of BNPL and Increasing Pay Later Pressure. In this episode, Dani Buschick connects with Hannah Gdalman from the Financial Health Network and Warren Bell from the Life. Money. You. team to unpack the rise of BNPL and how it’s shaping everyday financial health.
If you’ve found yourself relying on BNPL programs more than you’d like, BCU’s free financial well-being program, Life. Money. You.® offers resources to help you build better money habits with tools like videos, courses, live webinars, and personalized support from Certified Financial Coaches.
About BCU: BCU is a not-for-profit, member-owned credit union that is fiercely dedicated to Empowering People To Discover Financial Freedom. With over $6B in assets, BCU is committed to providing a fast, easy, and secure banking experience along with extraordinary service to more than 360,000 members. The BCU field of membership includes employees and their families from Fortune 100 companies across the US and Puerto Rico. Membership is also open to individuals who live or work in Northern Illinois, Southern Wisconsin, and Puerto Rico, as well as subscribers of BCU’s wholly owned Credit Union Service Organization (CUSO), Life. Money. You.®. All BCU members enjoy lifetime access to financial services and well-being programs that inspire confidence through the brand promise “Here Today For Your Tomorrow.”
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