2 Times Frugal Shoppers Use Buy Now, Pay Later Services — and When They Avoid Them
Written by
Justice Petersen
Edited by
Joe Evans
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As buy now, pay later (BNPL) services have increased in popularity, consumers use them for various reasons. Many people use these services for necessary budget essentials like groceries or bills and use them for items considered “wants” rather than “needs,” like clothing.
According to 2024 statistics from Exploding Topics, BNPL is a $532.9 billion global industry, with around 79 million BNPL users in the United States. By 2030, the BNPL industry is expected to reach $3.27 trillion.
While these services offer many benefits, they have the potential to hurt your finances if they aren’t used carefully. For budget-conscious shoppers, BNPL platforms are often used for select purchases — and are strictly avoided for others.
When To Use Buy Now, Pay Later Services
There are a few purchases that frugal shopping experts recommend to use BNPL services if you want to save money and stay within your budget.
For Urgent Purchases
Buy now, pay later services are good for urgent purchases without the finances to immediately pay for upfront. These could include appliances, furniture or travel expenses.
“If you’re a yield-oriented thrifty shopper, buy now, pay later might be a good fit if you have to purchase an essential item that you need right now but would otherwise undermine your monthly budget, such as a stove or necessary electronics,” said Erika Kullberg, attorney and personal finance expert.
These services help spread out these purchases over time, making expensive necessities more affordable without accumulating debt like a credit card.
“What’s more, this can allow you to buy an item you need more urgently if you don’t have enough cash to cover it at the time of purchase without paying additional fees,” said Andrew Woroch, consumer finance and budgeting expert.
For Improving Your Credit Score
Numerous consumer benefits are provided by BNPL services, such as no-interest payment plans that can help shoppers keep control of their spending. With a BNPL payment plan, users can split the cost of a high-price purchase into monthly payments that accommodate their monthly budget.
“Consumers with good, fair or poor credit records can benefit from the use of buy now, pay later services, which usually do not entail a hard check on a consumer’s credit record,” Kullberg said.
However, BNPL services can only improve your credit score if you make the monthly payments on time. Late or missing payments result in accumulating debt, late fees and penalties.
“Deferrable payment options might also encourage spending money on things shoppers cannot afford to buy over the long term,” Kullberg said. “Racking up multiple purchases on multiple payment plans can cause debt to snowball so much that monitoring monthly payments will become more challenging than with traditional credit cards.”
When To Avoid Them
While BNPL services come with financial benefits, they may also come with consequences if not utilized in a way fitting to your finances.
Clothing and Accessories
platforms. However, frugal shoppers recommend not using BNPL to pay for items like clothing, shoes and accessories that are more wants than necessities.
“Examples of what to avoid would be clothing and shoes or a new electronic just because you want it,” Woroch said. “Distinguishing between needs and wants is very important. Plus, you have to look at the total cost of the item rather than the monthly payment amount which can give you a false sense of affordability.”
Listing out all your monthly bills is a great way to see if you can add another BNPL purchase or not, especially if the purchase is on something you don’t necessarily need.
Impulse Purchases
It’s not recommended to use BNPL services if you’re unsure of the payment timeline, or are currently paying multiple BNPL monthly payments. Additionally, BNPL services should not be used for impulse buys.
“BNPL can be quite dangerous for non-essential or impulse purchases because the deferred payment plan can provoke modest spending into unnecessary indulgence,” Kullberg said.
How To Save the Most Money With Buy Now, Pay Later
Essentially, BNPL services can help consumers stick to their budget, save money and improve their credit scores.
However, it’s important to know your budget and only use these services for necessities — not impulse buys or splurges. Doing so can potentially hurt your credit score but result in risks such as late fees or credit card debt.
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