Things to know when shopping with buy now, pay later services

Martha Pierson



“Buy now, pay later” (BNPL) is one of today’s most common payment options. BNPL breaks the total price into equal payments, making repayment more manageable for the customer.

Similar to other payment services, you need to know what it is all about so you won’t be surprised later on.


Things to know when shopping with buy now, pay later services. Source:

Payments Are Divided

Consumers are not required to pay back the financing all at once. Companies that offer this alternative payment option may provide terms between four and 12 months. The general rule is that the shorter the payment term is, the higher the interest rate is.

If you know that you won’t be able to make shorter-term repayments, you can apply for a longer payment duration. Of course, you may pay more interest in the long run, but a smaller regular payment can help you avoid biting off more than you can chew.

Promotions Are Available

Some BNPL companies offer a 0% interest rate for your payments. With this, you won’t be charged monthly interest. If the company doesn’t have 0% interest rate offers, the rates will typically be low. Others even offer rebates or cashback.

Charges and Penalties

One thing to keep in mind about BNPL is that some companies charge high-interest rates, especially for missed payments. Even for 0% interest rate promos, this type of condition exists. If you happen to miss a payment, you will have to settle additional charges and penalties.

Reading the terms and conditions can help you determine if there are other charges, such as processing fees. Knowing the terms will help you plan your budget and avoid unwanted penalties.

It Can Be Easy to Apply

Unlike applying for new credit cards, finding out if you qualify for BNPL services is quick and easy. The companies offering BNPL options may only ask for the essential information regarding your financial status and cash flow.

Many online companies include the BNPL application as part of the checkout process. When that’s the case, you may see a prompt outlining the equal payments and the total cost, which can help you decide if it’s a good option.

It’s Available Online and at Many Physical Stores

BNPL services are more common online than in-store. However, many retailers have started using point-of-sale (POS) financing platforms to give their customers more buying power.

It’s Popular with Millenials and Gen Z

In 2019, 6% of Gen Z online consumers were using BNPL. That rose to 36% by 2021. Millennials are even more attracted to this type of financing, with 41% of them using the service in 2021.

Beware of Buying Too Much

One of the risks of BNPL is signing up for a payment plan that you cannot afford. So, before you agree to anything, ask yourself if you need the item and if you can make the monthly payment.

Stay Safe

Fraud is not uncommon in this vertical. Recently, the FTC went after a major POS lender for working with a merchant generating false leads. So, yeah, it’s dangerous out there. To keep your personal information from getting into the wrong hands, you should only get BNPL services from reputable companies.

The Bottom Line

Buy now, pay later plans can help you in many financial aspects. Whether it is a bulk purchase or a minor one, with its simple process, you’ll be able to buy what you want or need according to the payment terms that fit you. But before you sign, remember to read the details of their terms and conditions because the last thing you want to happen is to be in debt and become financially unstable.

Martha has a passion for writing and is mainly focused on covering financial and business management topics.


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