You'll also generally need to make a payment from a debit or credit card at the time of purchase. Here's what you should know about the two major methods for short-term financing, and how to decide which one will work best for you.īuy now, pay later services give customers the same basic functionality of credit cards - easy payments with no cash - but they usually eliminate fees and interest in exchange for an agreement that you'll pay back the loan within a very short term, usually six weeks. Power, "Customers like BNPL because it helps them to pay for things over time, they appreciate the ease of purchasing and checkout, and overall, they feel that loan and repayment terms are easy to understand."īut credit cards offer the same benefit, right? While credit cards also let you buy something now and pay for it later, they work a little differently. Similar to the layaway programs of yesteryear, the concept of BNPL services isn't new - but never has BNPL been so quick and easy to access as on today's smartphone apps.Īccording to Paul McAdam, senior director of banking and payment intelligence at J.D. And customers love BNPL, spending $120 billion through these programs in 2021, per GlobalData.
These miniature installment plans let you spread the price of your item over a set period of time, often six weeks with a total of four payments.Ĭompanies like PayPal, Amazon, Affirm, Klarna, Afterpay and Apple have invested heavily in BNPL, while credit card providers are filling short-term financing gaps with their own BNPL services.
When you can't afford a purchase upfront, buy now, pay later services may seem enticing.
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