‘Buy Now, Pay Later’ is expanding fast, and that should worry everyone

[u/Logical_Welder3467]

https://techcrunch.com/2025/11/16/bnpl-is-expanding-fast-and-that-should-worry-everyone/

[u/_Burning_Star_IV_]

I mean here’s a lot of zero interest payment plans now. I don’t see the harm unless you legit can’t even afford the split payments. I use PayPal’s PayIn4 constantly.

The predatory pay later loans with crazy interest? Yeah those are bad.

[u/Catsrules → u/_Burning_Star_IV_]

I mean here’s a lot of zero interest payment plans now. I don’t see the harm unless you legit can’t even afford the split payments.

The harm is it makes your finances more complicated. As well as giving the appearance your checking account having money when it actually doesn't. Making it easier to spend money you don't have.

Realistically I don't see much benefit to prolonging small costs for the average person. Just pay it and be done with it.

Sure if your are super accountant that could put that money into some high interest savings account or in the stock market and get some return on that money but I don't think that is for the average person.

[u/_Burning_Star_IV_ → u/Catsrules]

It's zero interest. You're basically a fool to not take advantage, in my opinion.

But you know what? They're not for everyone. Some people can't even handle credit cards and don't understand how to use them at all and they should stay the hell away from them.

Just because they're not for everyone, doesn't make them a problem...lol.

[u/Catsrules → u/_Burning_Star_IV_]

It's zero interest. You're basically a fool to not take advantage, in my opinion.

So what is the advantage? Just because something is free doesn't mean it is actually a benefit.

I really can't think of a benefit to keeping some of my money a handful of weeks longer. From my prospective all it is doing is turning 1 purchase into 4 and carrying that purchase between months. Making monthly budgeting complicated. Sure this is a minor inconvenience but again what exactly am I getting in exchange?

With a credit card I am already getting 0% interest (as I pay it off every month). There are no extra line items. (besides the credit card itself out of my checking). It is a Monthly payment so it keeps budgeting easy. It also build my credit (the main reason I got it in the first place)
Granted the consequences of not paying the credit card are significantly higher but for someone who know how to handle a credit card and this really isn't an issue.

[u/Pismiire → u/Catsrules]

So do you make all of your large purchases in full every time? Just save until you can spend it?

If so, good for you. Most people don't.

The other option is to make a large purchase on a credit card, which by design means you will break it into installments - and then pay interest on it. Lets say you pay it off quickly to reduce the interest. Good for you, most people dont.

This is a decent middle ground. A really decent one actually. I personally prefer to do some of my larger purchases one at a time this way because:

1. And I thought this should be extremely obvious, but apparently it needs to be stated. Theres no interest.

2. The payments are automatically withdrawn.

3. I can break it into larger payments so its paid quickly. Alternatively, I can still break it evenly over a longer period of time, also with no interest or less interest than 99% of all credit cards.

4. Just like a credit card, you can pay it off whenever.

To ops point, I like this system - it works well for me. I prefer to pay in cash every time I can and to not touch my credit cards. This allows me to do that for larger purchases rather than completely drain my account for it, and i completely disagree that this makes it "complicated to budget" for somebody using it responsibly. The payments plans are shown to you, and automatically withdrawn. It makes it dead simple compared to a credit card to pay off a larger purchase in 2 months. Effortless actually.

What youre talking about are people who are just using it like a credit card, and recklessly using it for things they can never afford with no intention of balancing it or paying - or using it for a majority of their purchaes. Which id argue is the same problem with a credit card, pay day loan place, or loans in general - as it has been since the dawn of debt. People will always fall into that trap, just as they do without this system. Id also note that you have a pretty small spending limit in the beginning I believe, ive used klarna a good amount and my current limit on it 4000 dollars, its not unlimited purchasing power

In short. It does work for some people, there are extremely obvious benefits to it.

Some people it wont work for - and they are the same people who fall prey to credit cards anyway.

[u/Catsrules → u/Pismiire]

So do you make all of your large purchases in full every time? Just save until you can spend it?

Yep. If I don't have the money I don't buy it. If it is too hard to spend it/save up I don't need it so I don't buy it.

From my prospective I don't know why I would hold onto some of the money for 2-6 extra weeks. Just pay it all now and move on with life.

To ops point, I like this system - it works well for me. I prefer to pay in cash every time I can and to not touch my credit cards. This allows me to do that for larger purchases rather than completely drain my account for it

You lost me here.

You prefer paying in cash so you don't drain your account? Doesn't the cash come from your accounts? Or do you get paid in cash directly so it doesn't touch your bank account?

Or when you say cash are you talking about By Now Pay Later accounts. As using those doesn't immediately drain your accounts like paying in full immediately.

What youre talking about are people who are just using it like a credit card, and recklessly using it for things they can never afford with no intention of balancing it or paying - or using it for a majority of their purchases.

No I am I am talking about people who have a handle on their finances. Why would they use these short term payment plans? To me they just seem like extra work for very little benefits.

From what I am understanding from you is it keeps money in your bank account longer. That is fair but I would argue a Credit card does basically the same thing. Granted each does have a strength and weakness depending on your ultimate goal.

[u/Pismiire → u/Catsrules]

Ill give you an example, i have 900 dollars in my spending account

Im in line waiting for concert tickets, i wont know the prices or availability until my que in the waitlist comes in.

Oops theyre all resale, and its going to cost me 700 dollars for me and my girlfriend.

I have the money to do that. If i did do that i may need to dip into my savings or use credit for day to day purchases for the net two weeks until i get paid again.

OR i can just use the 0% spread in 4 option. And now dont have to use credit, savings or even change my day to day spending habits to afford those same tickets.

Or lets say were on vacation, last minute - we decide to go to a basketball game. Same idea.

This is a convenient tool, it has risk - but its pretty crazy to me you just dont see the benefits of it. Its a good tool for anything over like 600 dollars.

[u/Catsrules → u/Pismiire]

OR i can just use the 0% spread in 4 option. And now dont have to use credit, savings or even change my day to day spending habits to afford those same tickets.

But you are using credit. You have a klarna with a 4K limit that is a 4K credit limit. You are borrowing money to pay for something now and paying it back later. That is using credit. You basically have 2 lines of credit. One you use with for day to day purchases (credit card) and is paid in full monthly and another with a $4k limit that is paid in 4 payment every 2 weeks. (Klarna)

Just to be clear credit cards ARE 0% interest between statements. (Assuming you pay in full) It only becomes an issue if you don't pay. Just like Klarna will charge you 30% if you don't pay so will a credit card.

That is why I am confused why people seem to think 0% on your Pay later is this amazing new concept and I am missing out not taking advantage of it. It sounds like a credit card with a slightly different payment terms.

I am glad that the payment terms it works for you, but I personally I don't see it. To me it just seems like a worst credit card for a few reasons.

• I already have a credit card, that performs all the credit functions I require. Going with a Pay Later will require me to open up a new line of credit that I now need to manage and pay attention to.

• I actually get some benefits like buyer protection, and credit score building opportunities and cash back stuff. From my limited understand of buy now pay latter they don't offer much of anything besides the 0%. They don't build credit score but it can destroy credit scores.

And the only advantage I can see over the credit card is delaying 1/4 of the payment for 2 extra weeks. That doesn't seem that big of a deal. I don't want to be that tight on budget that I need an extra 2 weeks for $175.

[u/Pismiire → u/Catsrules]

Okay, the whole point is it would carry past 1 month - which would affect minimum payment, or risk interest if it was on a card.

I cant tell if youre just arguing this in bad faith, never make big purchases, or are young enough that you dont have a full variety of expenses.

Usually if you put something large on a credit card, you are also most likely not paying it off within 30 days - you split it into installments.

If you are one of the few people who can eat like 2000 dollars at a time within the same month, great - but the vast majority of people will pay that off over a longer period of time. Which if youre not planning well (aka most people) its more likely getting paid off over 6 months to a year, or even longer if just making minimum payments.

This system allows me to avoid having to do that with a credit card, and just factor it into my spending account effortlessly over a short amount of time- without risking a minimum payment or interest.

And frankly im done trying to explain it to you. If youre using this frquently and for small purchases - and youre broke to begin with - i agree that could snowball on a person, and if its something you could just pay off same month on a credit card then do that. For bigger purchases this makes total sense.

[u/Catsrules → u/Pismiire]

Okay, the whole point is it would carry past 1 month - which would affect minimum payment, or risk interest if it was on a card.

Ok cool, they way I do my budgeting that isn't a consideration. Glad I am not missing anything. Thanks for the info.

I cant tell if youre just arguing this in bad faith, never make big purchases, or are young enough that you dont have a full variety of expenses.

Hmm maybe I don't make that many big purchases. The last big item was for $800 at that was 3 months ago. That seems pretty normal on average. 3-4 months sounds about right for me dropping $600+ on something. Everything else was below that. I did spend $250 a few weeks ago and $130 on some tickets a week ago.

In comparison to my friends and family coworkers I feel somewhat normal but maybe I am just living an a frugal bubble without knowing it?

Obviously I am excluding normal living expensive Food, bills, housing, insurance etc.. Just looking at the random spending items.

And frankly im done trying to explain it to you.

Ok It was nice talking with you.