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6 Most Popular Buy Now, Pay Later Apps — and What Experts Think of Them
BNPL has become a Gen Z shopping staple. Is it a bad idea?
If you’re going to buy something that costs $100, would you rather shell out the full $100 right now, or pay $25/month for the next four months? Thanks to Buy Now, Pay Later (BNPL), the trendy loan service favored by Gen Z, you can delay your shopping payments by taking out an installment loan paid back over time to your preferred service. BNPL allows customers to use payment plans, so you owe smaller amounts of money over time rather than paying the full amount upfront. Some argue that BNPL can be used as a budgeting tool while others point out that, according to Credit Karma, Gen Z holds an average debt of $16,283 mainly from student debt and auto loans — and BNPL only increases that amount.
Plus, it truly seems like a new BNPL service, like Affirm, Klarna, or Afterpay, pops up each year. What’s the difference between all of them? Which one is the best? Do you end up paying more because of interest, like a credit card?
The good news is that most of the popular BNPL plans (like a simple Pay in 4 model, where your purchase is divided into four equal payments) will not charge you any interest. However, keep an eye on the APR (Annual Percentage Rate) that comes with larger, multi-month BNPL loans — if they charge an interest rate and you miss one or more payments, your purchase could end up costing significantly more in the long run.
And Buy Now, Pay Later isn't the same as a credit card, either, although you want to avoid paying interest by staying on top of your payments for both. They're two different tools — responsibly using credit cards will help you build credit, whereas BNPL isn't a recommended way of building credit. Applying for certain BNPL loans may temporarily affect your credit score, although that varies by service.
We spoke to multiple financial experts to get their input on the Buy Now, Pay Later trend, and the general consensus is that you need to shop with discretion.
“It’s something I avoid,” admits Morningstar journalist Margaret Giles. “It encourages you to spend beyond your means and I find it can be deceptive. I would ignore your BNPL credit limit and think about what you actually can afford.” UBS Financial Advisor and Managing Director Rachel Gottlieb echoes that sentiment, telling Seventeen, “You need to be smart about it. You don’t want to get into the bad habit of buying something you can’t afford and suddenly not have the funds to pay it off, because that’s how you accumulate debt.”
Carmen Perez, creator of the MUCH budgeting app, notes that BNPL can be used tactfully if the temporary loan will lead to a greater financial pay-off in the near future. “If you have to use BNPL, do it in a way that pays off for your future self, like if you need to use a payment plan to afford a course that'll help you pivot to a higher-paying career,” advises Perez, who recently joined Secret’s Board of Financial Experts to support the brand's initiative to provide 1 million young women with access to financial education. “But how you manage a little will be how you manage a lot, so unless you’re using BNPL for something that’ll be a return on your investment, I don’t see the point of it.”
Avoid Buy Now, Pay Later if...
- You tend to overspend on non-essentials.
- You don't have guaranteed income.
- The purchase is more of a "want" and less of a "need."
- You don't have enough in your bank account to pay off the full loan.
Buy Now, Pay Later might be useful for you if...
- You know how to avoid spending beyond your means.
- The item is an essential purchase for school, work, health, or your future career that you know you'll be able to pay off. Think a laptop, a camera for that photography gig you booked, or a mattress for your first apartment.
- You have a good handle on your monthly budgeting and prefer to spread out payments for a large essential purchase to avoid skewing your budget.
Here are the most popular Buy Now, Pay Later apps and websites, along with everything you need to know about each service's fees and policies to make an informed decision about using BNPL for your purchase.
Hannah is the assistant shopping editor at Cosmopolitan, covering all things from cute apartment decor to trendy fashion finds, TikTok products that are actually worth your $$$, and the perfect gift to buy for your boyfriend's mom. She previously wrote for Seventeen and CR Fashion Book. Follow her on Instagram for hot takes on red carpet fashion and unhinged updates on the books she’s reading on the train.
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