By Emily Christ
Health and Human Sciences Extension Educator, Purdue Extension Elkhart County

Emily Christ

ELKHART COUNTY — During the COVID-19 pandemic, online shopping increased tremendously. Spending money became easier and easier, especially during a time when individuals were financially strapped.

While buy now, pay later  services have been offered for years, companies such as Klarna, Afterpay, and Affirm offer zero-interest payment plans for many different partnering retailers. Usually, the payments are broken up into four even payments every week or every other week depending on the service. These services can be used anywhere from online clothing retailers to larger online purchases such as mattresses or furniture.

Over the years, many stores have adapted this purchasing tool to make shopping easier and more accessible to consumers. There are many stores where you can physically go in and use the BNPL service as a payment. Some of these stores include Finish Line, Sephora, Ulta, Target, etc. While this may seem like a great service to offer, it can be dangerous to people’s long-term financial goals.

There are hidden risks to be aware of when using BNPL apps/services. It’s important to know your financial situation and your management abilities to ensure the BNPL loan will be paid promptly.

When using BNPL services, ask yourself if the purchase is absolutely necessary. Is buy now, pay later your only way to afford it? Are you completely certain you can make the payments on time? In most cases, it is generally better to pay for a purchase in full and not have a loan following you, but if you need to use one of these services, be sure you are taking responsible steps and making payments on time.