5 Reasons People Use BNPL — and When You Shouldn't
Do you keep a running budget in your head, or are today's costs, a problem for the you of tomorrow?
Buy now, pay later (BNPL) services have exploded in popularity over the past few years. What started as a niche payment option for online shoppers is now a mainstream way to cover everything from holiday gifts to groceries and everyday essentials.
In fact, nearly 43% of consumers say they've used or plan to use BNPL for purchases, according to an Experian survey. While splitting a purchase into smaller payments can feel convenient, the reality is that BNPL isn't always as harmless as it looks. Here are five reasons people use BNPL and why relying on it too often could hurt your finances.
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1. They Want To Spread Out Payments
One of the biggest appeals of BNPL is simple: It lets you break a purchase into smaller installments rather than paying the full amount upfront.
Many shoppers use BNPL to make big purchases feel more manageable in their monthly budget, especially during high-spending periods like the holidays. Nearly half of consumers say BNPL plays a role in helping them cover seasonal expenses.
How this hurts your finances: Spreading out payments may make a purchase seem more affordable than it actually is. Research shows that installment pricing can increase spending because smaller payment amounts feel less painful than paying in full.
2. They Don't Want To Use Credit Cards
Some people see BNPL as a safer alternative to credit cards, especially if they're trying to avoid high interest rates or already carry credit card debt. BNPL often offers short-term, interest-free payment plans, which can sound like a smarter option than paying 20% APR on a credit card balance.
How this hurts your finances: BNPL isn't always "free." Missed or late payments can trigger fees and may now be reported to credit bureaus in some cases, potentially lowering your credit score just like a missed credit card payment.
3. They're Trying To Keep Up With Rising Costs
Many households are turning to BNPL simply because everyday expenses are getting harder to manage. Some people even rely on BNPL to pay for essentials like groceries or household supplies.
How this hurts your finances: When you rely on installment loans to buy essentials, you risk creating a cycle where future income is already committed to past purchases.
4. It Feels Easier To Get Approved
BNPL applications are often quick and require less-stringent credit checks than traditional loans or credit cards. That makes them appealing to younger consumers or those with limited credit history.
How this hurts your finances: Easy approval can make it tempting to open multiple BNPL plans at once. Research shows some consumers carry several BNPL loans simultaneously, increasing the risk of missed payments and financial strain.
5. They Underestimate How Much They're Borrowing
Unlike a single credit card balance, BNPL purchases are often split across multiple apps and retailers. This can make it harder to track how much you owe overall.
How this hurts your finances: When you lose sight of your total obligations, it becomes easier to overextend yourself.
BNPL can be helpful in limited situations, especially if you're confident you can pay off the balance on time and avoid fees. But using it regularly to manage everyday expenses or impulse purchases can create long-term financial stress.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
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