- Buy now, pay later programs allow you to purchase items without paying for them all at once.
- When shopping online, you can usually get approved for BNPL within a few seconds at checkout.
- However, don't let BNPL entice you into spending money you don't really have.
Credit cards have long been a popular payment method for consumers to make purchases and then pay for them in installments over time. Another option that has been gaining a lot of traction online is called buy now, pay later.
What is buy now, pay later (BNPL)?
Buy now, pay later (BNPL) allows you to buy items without paying for them all at once. Instead, you pay only a portion of the price upfront, spreading out the remaining cost over a predetermined number of installment payments. These payments are often interest-free, and the approval process is fairly fast.
BNPL has become an exponentially more popular option for consumers, particularly for those who do their shopping online. Companies like Affirm, Afterpay, Klarna, and Zip all partner with various retailers to offer point-of-sale installment lending (another name for BNPL).
Companies may limit the amount you can finance through BNPL, and not all purchases will be eligible for this plan.
How buy now, pay later works
The BNPL process
There are no one-size-fits-all rules for buy now, pay later programs, as each company operates differently. However, this is generally what you can expect with BNPL:
- Choose the BNPL option when checking out at a participating retailer and get an approval decision within seconds.
- Provide personal information that could include your name, date of birth, and Social Security number.
- Get approved for the BNPL financing.
- Put down a small upfront payment, for example, 20% of the overall purchase amount.
- Choose whether to make automatic payments from your debit card, credit card, or bank account or choose to pay by check.
- Pay off the outstanding balance over a set number of weekly, bi-weekly, or monthly installments (which are usually interest-free).
BNPL requirements and eligibility
Requirements and eligibility for buy now, pay later will vary among providers. However, you may still be eligible even if you have bad or no credit at all. You must be at least 18 years old to use BNPL services.
The BNPL provider is likely to do what is known as a soft credit check (which has no impact on your credit score) when you apply. Most of the time, you will either be approved or denied within minutes or even seconds.
Pros and cons of buy now, pay later (BNPL)
Pros of BNPL
- A high credit score is usually not required. You can often qualify for BNPL with a low credit score, unlike with a personal loan or a credit card. It could be a good option for borrowers whose credit history isn't in the best shape.
- Often, no interest is charged. No-interest payments allow you to save money compared to other methods of borrowing, like using a credit card or getting a personal loan. Keep in mind that this isn't guaranteed and that some lenders may not offer interest-free terms.
- Fast approval. You'll often be approved for BNPL within seconds at checkout.
- Offered at many major retailers. You can find BNPL plans at many of the places you already shop, as a lot of BNPL companies have partnered with large retailers to offer these plans. They're sometimes available in stores, but they're more common online.
Cons of BNPL
- Can lead you to spend beyond your means. If you can afford the item you want to buy and plan for how to pay for it, BNPL can be a great option. But don't let BNPL tempt you into spending money you don't really have — the allure of smaller installment payments could make an item seem more affordable than it is.
- Late fees. While some BNPL companies don't charge late fees, others may tag you with charges that are either a flat rate or a percentage of your purchase amount.
- Late payments can hurt your credit. While BNPL programs generally don't report on-time payments, they often report late payments and any default on your payments. These can negatively impact your credit score.
- Won't build your credit or earn you rewards. Many BNPL programs won't report your on-time payments to credit bureaus, so it won't matter for your credit score if you make consistent payments. Additionally, your payments won't qualify you for rewards like they may if you put them on a credit card.
Top buy now, pay later providers compared
| Affirm | Afterpay | Klarna | |
| Loan limit | $50 to $5,000+ (varies by retailer) | Varies | Varies |
| Payment options | Every 2-4 weeks | Every 2 weeks | Every 2 weeks |
| Hard credit check | No | No | No |
| Late fees | None | Late fee of 25% or purchase or $68 | Late fee of up to $7 or 25% of purchase |
| Major retailers that accept it | Amazon, Walmart, Target, eBay, and more | Expedia, Sephora, Anthropologie, and more | Amazon, Walmart, Target, Apple, Macy's, and more |
BNPL and consumer financial health
With increased use of buy now, pay later services, concerns have arisen about their impact on borrowers' financial health.
The Consumer Financial Protection Bureau (CFPB), in a 2025 report, found that BNPL borrowers were more likely to be using credit cards, payday loans, and other high-interest financial services compared to consumers who do not use BNPL products. The study also found they're more likely to be highly indebted or have revolving balances or delinquencies on their credit cards.
If you're fortunate enough to have the time to wait to make your purchase, buying your item all at once will prevent you from adding to your total debt and remove the stress of keeping up with weekly or monthly payments. Set a target amount for your purchase and save a portion of your paycheck each month to reach your goal.
If you are going to make a purchase using buy now, pay later, be sure to take a step back and think it all the way through before you push the button. Make sure you can cover all payments on time to avoid fees. Remember, you'll have to keep enough money in your bank account to cover automatic payments so you don't incur overdraft fees. And always carefully consider the full cost of any purchase — not just the installment payments on it — to avoid overextending yourself financially.
FAQs
BNPL is a type of installment loan, which means you're borrowing money to make a purchase and paying it back over time. However, it's usually for smaller amounts, often interest-free, and the time to pay it off is much shorter than most traditional loans.
Some BNPL services may perform a soft credit check, which doesn't affect your credit score. Others might not require a credit check at all.
Buy now, pay later services generally won't have any effect on your credit score if you make payments in full and on time. However, missed payments or defaults may be reported to credit bureaus by some providers, which would have a negative impact on your credit score.
Some BNPL services charge late fees for missed payments. However, many do not charge interest if payments are made on time. Be sure to fully understand the terms and conditions as well as any applicable fees before you use a buy now, pay later service.
When selecting a BNPL provider, consider factors such as the repayment period, any fees or interest rates charged, the vendor's reputation, and your ability to make timely payments.