'Buy Now Pay Later' Costs More Than You Think

In 2025, 52% of Americans made 'Buy Now Pay Later' (BNPL) purchases as a way to offset everyday expenses, making it a preferred payment method for everyday items. Let's talk about it.

BNPL is kind of a modern day layaway, only you immediately receive the purchased item for 25% of the price, as you've agreed to make the remaining payments in monthly installments. This means more money in your pocket in the immediate future. 

How do you know if you're using BNPL? When making purchases, you'll see multiple payment options by lenders like Affirm, Klarna, and Sezzle.

Electronics and clothing are among the top items purchased; however, buying groceries using BNPL is increasingly common, which is no surprise considering inflation is kicking everyone in the pants. 

BNPL is enticingly touted as "interest and fee free!" and you're instantly approved as there's no hard credit check. The act of paying off an item in interest-free installment payments has got to be waaay better than adding to those high-interest credit card balances… right? 

BNPL is a loan and with lenders, there is always always always a catch. 

BNPL is similar to credit cards in that when life inevitably begins life-ing you and you're no longer able to afford those installment payments, you will be charged fees and interest. But that's gotta be rare, right? Unfortunately, no.

Small installment payments can add up quickly over time, oftentimes becoming unmanageable. 41% of people who use BNPL default on payments. This means many Americans are paying interest and fees on groceries long ago consumed and clothing that is already out of style.

I would never presume to tell you what to do with your hard-earned money. My aim is simply to make those who aren't already aware what they're signing themselves up for. 

Regulation is sparse for BNPL, which means it's easier for lenders to make it seem like it's better than using credit cards. But BNPL loans have interest rates as high as 36%, exceeding most credit card rates (mid-high 20% APR). 

If you're like many of my clients and tired of feeling weighed down by debts, I encourage you to think twice about what you're actually signing up for when enticed to use BNPL. If you can't pay the item off immediately, consider pausing.

Future you will be grateful.

**Content researched and written by a human - not AI**