In this article:
Buy now, pay later (BNPL) services let you pay for purchases in four bi-weekly installments, but there's usually a limit to how much you can spend. To increase your spending power, you may be able to open several buy now, pay later accounts among different providers—but that doesn't mean you should. Juggling payment plans for multiple BNPL accounts can be a real budget buster, and missing payments can be costly.
Can I Have Multiple Buy Now, Pay Later Accounts?
If a payment plan isn't approved with one service, opening up accounts with other BNPL companies could help you split up payments for a purchase. In reviewing the eligibility requirements for four popular BNPL platforms—Klarna, AfterPay, Sezzle and Zip—there isn't a rule against having multiple BNPL accounts with different companies.
However, BNPL providers may perform a soft credit inquiry when you apply for one of these installment plans. While a soft credit check won't negatively affect your credit score, it does give a creditor information about your payment history and unpaid balances that could affect your ability to qualify.
Whether you can open multiple accounts with one BNPL provider depends on the company. For example, Klarna's website says it's possible to sign up for multiple Klarna accounts using different emails, but the company recommends having just one account because it's an easier way to manage all of your payments. Meanwhile, AfterPay is a bit stricter with its account rules. According to AfterPay's terms of service, having multiple accounts is prohibited altogether. Before opening several accounts with a company, be sure to read through the fine print.
Risks of Having Several BNPL Accounts
Despite it being possible to set up payment plans with many different BNPL providers, it may not be a good idea. Here are some potential risks of having multiple BNPL accounts:
- It could encourage you to spend more. Having the option to spread out payments instead of paying all at once could make you more likely to spend money on items that you might not otherwise buy.
- Multiple plans can become unmanageable. Setting up a payment plan once every blue moon may not significantly impact your budget, but using BNPL often for shopping hauls could result in extra bills that are hard to keep up with.
- Taking on new debt could disrupt your financial plan. If payment plans start eating up a large portion of your monthly budget, you could have trouble keeping up with other important goals and obligations, like saving for retirement or paying off student loans.
- Late charges can add up. BNPL services may charge a late fee if you don't make payments on time, and racking up late payments on multiple plans can be costly.
- Interest can get expensive. Long-term BNPL plans that spread payments out over several months rather than a few weeks may charge interest, and that interest could end up costing you even more than the interest charged on a credit card or other loans.
How to Manage Multiple Buy Now, Pay Later Accounts
While there are risks to using BNPL plans, they do also come with perks. Most companies have flexible eligibility criteria, and the service is often free as long as you pay your bills on time. If you're considering using multiple BNPL plans for your shopping hauls, follow the four steps below.
1. Review Your Budget
Before setting up an installment plan, run through your income and monthly expenses to ensure payments comfortably fit into your budget.
2. Set Up Autopayments if You Can
BNPL services often have an automatic payment option you can sign up for, and using it can help guarantee payments are always made on time.
3. Try to Pay Off the Bill Early
BNPL payment plans typically break your charges into four payments, due every two weeks. If you have the cash to spare, making early payments could help you get rid of balances faster.
4. Use BNPL Services Sparingly
Using the BNPL option every so often instead of for everyday shopping could help you avoid racking up debt that's hard to pay off.
Consider Other Borrowing Options
The popularity of BNPL services has skyrocketed over the past few years. However, traditional modes of borrowing, like credit cards and personal loans, are still worth considering when you need cash. In some cases, they could even be a more affordable option for long-term financing.
Some credit cards offer introductory 0% annual percentage rate (APR) deals on new purchases for a year or more, which could give you an extended amount of time to pay off a balance interest-free. Borrowers with decent credit might also qualify for personal loans with competitive rates, low fees and low monthly payments.
If you're in the market for a new credit card or personal loan, Experian CreditMatch™ can help you get personalized product offers based on your credit profile so you can compare costs and determine the best way to borrow.