What’s the real truth about buy now, pay later (BNPL) plans? I wanted to discuss this because I actually did this once in the beginning of my journey.

What’s good about BNPL. Most plans split your plan up into a set number of months, usually 4-6 without any interest. It’s cheaper than using a credit card due to the lack of interest. And, most of these plans don’t require a full credit check. If your credit could be better, or it’s terrible, you may get approved. Finally, if you need to make a large purchase such as an appliance, mattress, etc. and don’t have the funds in your bank account, this type of plan can help you spread out the cost.

Then there’s a complimentary bad. First, you are more likely to overspend. After all, the payments are spread out and lower so it’s easier to spend more on what you need/want. Since the criteria for credit is relaxed, you may tend to borrow more than you would have if you paid cash. And, once you get one BNPL, people tend to use more of them concurrently. It becomes a never-ending spiral.

If you miss payments, you’ll incur late fees that can add up quickly. Also, some BNPL plans now report to the three credit bureaus. If they do, your credit scores will be damaged. If you happen to return the purchase, you still have to make the payments until the store processes your refund. Sometimes, this can take a very long time, even weeks. And because of these downsides, it’s been suggested that over 50% of buyers regret doing BNPL plans.

Moral of the story:

I did a buy now pay later plan and purchased my mattress. It was expensive and over my budget so I spread the payments out. But I did pay it off in the required amount of time and never paid fees or anything else. Be aware that the financing companies may sell your data, aren’t regulated like credit cards, and creates what’s called phantom debt. You don’t get a statement and may forget about your bill. If you’re focused, it works. If you’re already too overextended or emotional, BNPL can become a quiet debt spiral. Review BNPL Part 1 on September 18, 2025.