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Is Buy Now Pay Later a Good Idea?

Buy now pay later (BNPL) is a payment scheme which allows you to spread the cost of purchases. Find out more about whether buy now pay later is a good idea.

What does buy now pay later mean?

Buy now pay later is a payment option which means that you can purchase items while spreading the cost over an agreed period. Some of the common buy now pay later options include PayPal, Clearpay, Laybuy, and Klarna.

How does buy now pay later work?

In simple terms, the buy now pay later provider pays the company that you want to purchase product from, which allows you to pay back the cost later or in instalments. Each buy now pay later option works differently, so you should always read the terms and conditions closely.


Where can you buy now and pay later?

Buy now later apps and buy now pay later options on consumer websites are becoming increasingly popular credit options to allow people to buy without paying the full cost straight away. As per This is Money, buy now pay later schemes are the fastest growing online payment method.

Buy now later apps and buy now pay later are also becoming more widely accessible. The Klarna buy now pay later option is now available on many popular shopping websites, from fashion brands such as New Look and Boohoo, to online retailers which sell a large range of products such as Amazon. You can even shop directly on the Klarna website to access all the brands which offer this buy now pay later option on one website. Similarly, Paypal recently introduced buy now pay later loans in the UK, according to Global Banking and Finance.

Does buy now pay later affect your credit score?

Hard credit checks may not be done with buy now pay later schemes, but it is important to remember that they may still affect your credit score negatively if you are not able to afford the repayments on time.


Is buy now pay later a good idea?

While many other types of credit loans may be under regulation by the Financial Conduct Authority (FCA), surprisingly, buy now pay later is unregulated which may mean there are more risks to consider.

This may mean that some buy now pay later schemes do not do affordability checks to make sure that you can afford the repayments. Generally, it may be a good idea to pay for your products up front if you are able to afford to, rather than using credit. When answering the question is buy now pay later a good idea for you, you should always consider your own personal finances, how much you can afford to pay back and whether you will meet the repayment dates. If the product is unaffordable or buy now pay later may encourage overspending, then it may be better to avoid this as a payment option.

Help with managing your finances

If you need help with managing your finances and existing debts, you can contact Consolidation Express.