Pros and Cons of Buy Now, Pay Later

Pros of Buy Now, Pay Later

Recent data shows that buy now, pay later services have taken off in recent years. A Consumer Financial Protection Bureau (CFPB) study released in 2025 found that more than 1 in 5 consumers with a credit history used BNPL in 2022. Increasingly, people like the chance to pay on their own schedule, use the service for online or in-store purchases and get inexpensive or free financing.

Here's a more in-depth look at the pros of BNPL.

Smaller Payments

A major benefit of BNPL services is that you can break up an expense into smaller, more manageable payments. When making a big purchase, you don't need to have all the cash in your pocket that day.

Most buy now, pay later services split up costs over several payments scheduled two to four weeks apart. This payment cadence often fits with biweekly pay schedules—allowing you to replenish your bank account before the next payment hits.

0% Financing

Getting 0% financing is a primary draw for most buy now, pay later users. If you make your BNPL payments on time, you typically won't pay any interest. If you're looking to break up payments without a service fee or any interest, a BNPL arrangement could work well.

No Credit Check

Some buy now, pay later services don't check your credit before approving you. If you're new to credit or rebuilding your credit, BNPL may be more attainable than other forms of credit.

Quick Approval and Checkout

While credit cards and personal loans may take days to receive and start using, BNPL is nearly instantaneous. BNPL services are often offered at checkout; applying is quick and straightforward.

Predictable Payments

When you borrow with BNPL, you know exactly how much you'll owe and when payment is due before you even make your purchase (assuming you don't incur any fees). These predictable payments can be easier to budget for than alternatives like credit cards, which can have changing payment amounts depending on how much you spend.

Cons of Buy Now, Pay Later

Though convenient, buy now, pay later isn't necessarily safer for your finances. Using buy now, pay later services can expose you to financial risks that may not be worth the convenience in the end. In fact, the same 2025 CFPB study found that most BNPL borrowers (63%) took out multiple BNPL loans at once—increasing their debt load and making it tougher to keep track of payments.

Some common BNPL cons include:

Potential Fees and Interest

If you miss a BNPL payment, you may have to pay late fees or interest on your unpaid balance. Depending on the amount charged by the BNPL lender and how these fees are structured, they can add up quickly.

If you stop making payments altogether, buy now, pay later services can turn your account over to a collection agency. Besides accruing more fees and interest during this timeframe, your credit score could also suffer.

Possible Overdrafts and Overspending

One of the biggest dangers of using BNPL services is that it can be easy to overextend your finances. Only looking at the cost of each payment may make it difficult to register the full cost of the item. When you make several purchases with buy now, pay later arrangements, bills can rack up—and be challenging to juggle. Plus, if you set up automatic payments without keeping a close eye on your bank account, BNPL can lead to overdrafts.

Missed Rewards and Consumer Protections

If you use BNPL in place of a credit card, you'll forgo your rewards and other credit card benefits. BNPL services typically don't have rewards structured like credit cards, which can be a deterrent for shoppers who have a great rewards card already. You also won't get other credit card benefits, like purchase protection.

There are workarounds, like paying off your buy now, pay later bill with a credit card to get rewards points (if your card allows it), but this may be overly complicated for some shoppers and could end up costing you more if you can't pay your full credit card bill.

Difficult Returns

If you need to return a BNPL purchase, you could be in for a wait and possibly a difficult process. Unlike making a purchase with a credit card, the merchant returns the funds to the BNPL lender (assuming the return is approved). The lender then passes on the return to you. While you wait, you may still have to make payments according to your BNPL plan or face late fees and penalties. If the purchase involves a dispute, completing the return could take weeks or months.

If the merchant provides the return in cash or store credit, you'll need to continue making payments on your BNPL plan until the amount is paid in full.

May Not Help Build Credit

Not all BNPL services report all borrowing activity to the credit bureaus. While this can be good news when you miss a payment, it doesn't help if you're trying to improve your credit. If building credit is your goal, you may be better off with a secured credit card.

Should You Use BNPL?

Before selecting "pay in four" at checkout, ask yourself whether or not you should use BNPL. Below are some common scenarios where it may or may not make sense to this financial service.

When to Use BNPL

• You can make all your payments on time. Only use BNPL if you're sure you can make all your payments on time. Otherwise, you could face fees. One way to use BNPL responsibly is to set up automatic payments to ensure you don't miss any—just make sure there's enough money in your account to avoid an overdraft.
• You want to avoid a large payment (but you understand the total cost of your purchase). No matter how much money you have in the bank, it's not easy seeing a huge drop in your bank account. Spreading out the payments over several weeks or months can help, as long as you understand and plan for the full cost of your purchase.
• You're confident you won't return your purchase. BNPL is a convenient way to borrow without paying interest, but that convenience can evaporate the moment you need to make a return. To avoid these headaches, use BNPL only when you're confident you'll keep your purchase.

When to Avoid BNPL

• You have time to save up. If your purchase isn't urgent, you can avoid BNPL—and its potential risks—altogether. Rather than forking over money to a BNPL lender every two weeks, save up that money until you have enough to make the purchase in cash.
• You're using it frequently for purchases. Stacking BNPL purchases can quickly turn your financial situation into chaos. To avoid this trap, don't use BNPL for small, frequent purchases like takeout or household supplies.
• You want to earn credit card rewards. If you can confidently use a credit card and pay it off each month, you may want to capitalize on credit card rewards. Depending on your card, you can earn cash back, points and other perks like travel and purchase protections. Just make sure you pay off the balance each month, or interest charges will quickly outweigh any rewards.

Alternatives to BNPL

Sometimes using buy now, pay later isn't the best way to finance a purchase. Whether you need a larger loan, prioritize credit card rewards or want to avoid borrowing altogether, consider these alternatives to BNPL.

Credit Cards

Used correctly, credit cards can offer interest-free borrowing, added consumer protections, travel rewards and other perks. If you can qualify for an introductory 0% APR credit card, you may have up to 21 months before you begin to owe interest. This can give you the breathing room needed for sudden, large purchases.

On the other hand, if you're keen on cash back or travel points, you can use a credit card to earn rewards and pay it off each month. As long as you don't carry a card balance from month to month, you won't incur interest charges.

Personal Loans

If you're making one or more larger purchases, a personal loan may be the right option. Personal loans are a type of installment loan, similar to BNPL. But instead of borrowing the money for a specific purchase at the point of sale, personal loan funds are delivered ahead of time as a single lump sum, to be used however you want.

Compared to BNPL, personal loans typically have longer loan terms (up to several years) and come in larger loan amounts (sometimes up to $100,000). However, you'll pay interest on a personal loan, and lenders require good credit for competitive rates.

Cash

Though not always possible, the safest option to avoid interest or fees is to save up for a purchase and pay in cash. If you have the flexibility to delay a purchase, you can avoid BNPL, credit cards and personal loans altogether—and the potential fees, interest and headaches that can come with them—by using cash or a debit card.

The Bottom Line

Like many financing options, buy now, pay later has pros and cons. In some cases, it's a convenient and cost-effective way to borrow. In others, it's a slippery slope that can lead to overextended finances. When weighing your options, consider your personal situation, the pros and cons of BNPL and alternative financing methods.

Whichever route you take, only use financing options that you can commit to paying on time. Doing so can help you avoid costly fees and damage to your credit score.

If you're considering a more traditional method of financing, good credit will give you more options. Check your FICO^® Score^Θ for free with Experian and learn about ways to improve it.