3 Reasons I Avoid Buy Now, Pay Later Plans Like the Plague


Whether you do your shopping in person or online, at some point, you may have come across an offer to sign up for a buy now, pay later plan, or BNPL plan. These agreements have you paying off your purchases over a short period of time — usually 12 weeks or less.

Recent research from The Ascent found that 35% of U.S. consumers have used a BNPL plan. But here’s why I make a point to steer clear of them.

1. I don’t believe in borrowing for leisure purchases I can’t afford in full

One thing I really don’t like about BNPL plans is that they can trick you into buying items you can’t afford. So can credit cards, for that matter. But I’ve never carried a credit card balance I couldn’t repay in full. And I refuse to sign up for a BNPL plan as per that same logic. The way I see it, if I can’t afford a leisure purchase (something like new clothing or electronics) in full, then I shouldn’t be buying it.

Plus, one of the perks of BNPL plans is that they don’t charge interest or fees if you stick to your payment schedule. But we’re all human, and humans sometimes forget things. I’d hate to be charged a penalty for failing to make a BNPL payment. And you’d probably feel terrible if the same thing were to happen to you.

2. I have emergency savings for purchases I can’t put off

Sometimes, a BNPL plan can come to your rescue if you’re faced with a sudden expense you can’t wait on. Let’s say your fridge stops running, for example. That’s a necessity. If a new one costs $2,000 and you don’t have that money on hand, then that’s a situation where it makes sense to sign up for a BNPL agreement, assuming you’re confident you can keep up with the payments based on your earnings.

But thankfully, I have an emergency fund for situations like that. So unless my cash reserves run out on me, in theory, I shouldn’t need a BNPL plan for a sudden purchase I can’t delay.

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3. I wouldn’t want to deal with the stress of owing money

When I borrowed money to go to college, I found the process of paying off my debt extremely stressful — even though I could afford my payments. Right now, I have a mortgage and a new car loan, but other than those obligations, I don’t have debts. And I’d like to keep it that way for the sake of my finances as well as my mental health.

Even though BNPL plans are short-term loans, they’re loans nonetheless. And that just plain makes me uneasy. If you’re someone who’s also bothered by the basic idea of being in debt, then you should really avoid borrowing in any capacity unless it’s absolutely necessary.

Although BNPL plans have their benefits, for the most part, I’m not a fan. I feel strongly that they trick consumers into thinking they can afford purchases they can’t. And for that and the reasons above, I refuse to sign up for one of these agreements. If you make it a rule to only spend money on leisure purchases when you have the cash, and if you maintain a solid emergency fund, you can avoid BNPL plans, too.

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