Buy Now, Pay Later (BNPL) financing continues to grow in popularity. These short-term loans, which are typically 6 weeks and usually interest-free, appeal to consumers who want flexible payments and no credit card debt.
Consumer advocates warn that BNPL services make it too easy for people to purchase items they can’t afford, which can result in late fees and costly bank charges. Personal finance experts worry about the growing number of people who use BNPL to buy everyday items, such as groceries, gasoline, and food delivery services.
In this episode, we discuss how BNPL works, the possible pitfalls, and the smart way to use these short-term loans.
Related Consumerpedia Episodes:
Episode 80: Debt Busters: Real-Life Success Stories
Episode 50: Finding a Credit Card That's Right for You
Additional Resources:
Consumers' Checkbook: The Hidden Costs of Buy Now, Pay Later
National Consumer Law Center: Risks and Advice for Buy Now, Pay Later Borrowers
Consumer Financial Protection Bureau: CFPB Research Reveals Heavy Buy Now, Pay Later Use Among Borrowers with High Credit Balances and Multiple Pay-in-Four Loans
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