Buy Now Pay Later (BNPL): Simple and Risky
Buy now pay later (BNPL) lets you split the cost of something into smaller payments over time. It sounds easy—but there are some risks you should know about:
1. Buy Now Pay Later Can Lead to Overspending
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Small payments feel harmless in buy now pay later—that $200 item might seem cheap when it’s just $50 now.
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Too many plans add up—if you’re using BNPL for several things, the bills can pile up fast.
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Impulsive shopping—It’s so easy to click “buy now” without thinking it through.
2. Late Fees Can Be Costly
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Miss a payment? You could get hit with a fee.
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Watch your bank account—if payments are automatic and you’re short on cash, you could overdraft and face bank fees too.
3. It May Affect Your Credit Score
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Before: Little impact. Now, more companies are reporting BNPL use to credit bureaus.
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On-time payments can help, but missed ones can hurt.
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Some BNPL plans may even check your credit and lower your score a little.
4. Fewer Protections Than Credit Cards
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Returns can be tricky—you might have to deal with both the store and the BNPL company.
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Fewer rules—BNPL isn’t as strictly regulated, so resolving problems might be harder.
5. Other Concerns
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Too many BNPL loans = trouble— It’s easy to lose track and build up more debt than you realize.
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Privacy—BNPL companies might use or sell your data.
Bottom Line:
BNPL can be helpful, but only if you use it carefully. Know the risks, read the fine print, and don’t take on more than you can afford.
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*
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