Mar 12, 2026
Linda Ta Yonemoto, a certified financial educator and founder of Good For You Money, says she’s seen the effect buy now, pay later (BNPL) schemes can have on consumers. A client of hers once accumulated a high four-figure debt after a BNPL spending spree that started with a $230 dress for a wedding and spiraled into luxury skincare, entertainment and dining purchases.
“BNPL makes consumers feel they can buy things they normally wouldn’t and spend more than they typically would,” Yonemoto told CBS MoneyWatch in an article published Aug. 19 (1). “It builds unsustainable spending habits.”
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For the uninitiated, a BNPL loan is a short-term financing option offered by some retailers at checkout that allows you to split the cost of a purchase over a series of payments, such as four equal payments over four months. You typically aren’t charged interest if you make your payments on time. But if you’re late, the fees and interest applied can be astronomical.
And a large portion of Americans who use BNPL loans do fall behind on their payments. Results from a LendingTree survey show that 54% of BNPL users admitted to making a late payment in the past, including 41% in the previous year (2). Furthermore, 23% of BNPL users say they’ve had three or more loans active at the same time. One-quarter of users have also used these loans to buy groceries amid rising prices.
Pros and cons of BNPL
Since BNPL loans are often interest-free — so long as you make your payments on time — they can make a large purchase more accessible and manageable. They could also be an option for people with limited credit history, since they don’t usually require a credit check and offer near-instantaneous approval, according to Experian (3).
Problems can start when loans begin to pile up. On top of big-ticket items, some people use BNPL loans for small everyday purchases. LendingTree’s survey found 33% of users view BNPL as a “bridge” to their next paycheck.
Costs can multiply through impulse purchases, late fees and potential credit damage. If you’re late with a payment, you could be charged a flat late fee as well as interest at rates that could exceed those on your credit cards. Defaulted accounts could also be sent to collections.
So, if you start stacking BNLP loans, can’t keep up with multiple payments or lose track of when you need to make them, you could end up worse off than before.
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Using BNPL responsibly
To avoid regrets (and snowballing debt), avoid stacking BNPL loans. If anything, aim for just one BNPL loan at a time and work the installment payments into your budget.
Take the time to ensure you understand the terms of the loan before you make a purchase — even if you’ve taken out BNPL loans before. Some services may have different billing cycles than others.
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For larger purchases, consider saving up money over time in a high-interest savings account instead of borrowing — especially if the desired purchase is more of a “want” than a “must” have.
If you’re already stuck on a treadmill of BNPL debt, try not to take out any new loans. Create a list of all your loans and when payments are due, and then work the debt repayments into your budget and calendar.
If the debt has become too big to handle, you may need to find an additional income source, get a debt consolidation loan or work with a nonprofit credit counselor to create a repayment plan.
The accessibility, interest-free payments and cash-flow relief provided by BNPL loans can be tempting. But, like any other loan, it can derail your budget and leave you further in debt if it’s not used responsibly.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
CBS MoneyWatch (1); LendingTree (2); Experian (3)
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Vawn Himmelsbach is a veteran journalist who has been covering tech, business, finance and travel for the past three decades. Her work has been featured in publications such as The Globe and Mail, Toronto Star, National Post, Metro News, Canadian Geographic, Zoomer, CAA Magazine, Travelweek, Explore Magazine, Flare and Consumer Reports, to name a few.
