Is Using Buy Now, Pay Later To Book Your Vacation a Smart Hack or Money Mistake?
Written by
Gabrielle Olya
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Molly Sullivan
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Buy now, pay later (BNPL) has become an increasingly popular payment tool, with usage increasing by 40% over the past two years, according to the Federal Reserve Bank of Boston. While BNPL is now a staple offering of many retailers, it’s also expanded its reach and is being offered by vendors throughout the travel industry, including airlines like Southwest and booking platforms like Expedia.
Because travel can be pricey, using BNPL when booking a vacation is tempting — but should you? GOBankingRates spoke to financial experts about the pros and cons of using BNPL to pay for your next trip.
Pros of Using Buy Now, Pay Later To Book Travel
When used wisely, BNPL can help make travel more financially accessible.
“BNPL can help you spread out the cost of travel, making it easier to afford big trips,” said Andrew Latham, a certified financial planner with SuperMoney.com. “It’s useful for locking in early deals or handling last-minute travel needs. If interest-free options are available and paid on time, it can be a cost-effective alternative to credit cards or personal loans.”
Using BNPL to book travel can also free up money you need for more pressing budget items.
“For [travelers] who have other immediate expenses or would rather retain cash reserves intact, BNPL can offer flexibility,” said Chad Harmer, founder, CIO and financial planner at Harmer Wealth Management.
Cons of Using Buy Now, Pay Later To Book Travel
Having the ability to delay payment for a trip can be convenient, but BNPL should only be utilized if you can actually afford the upcoming payments.
“BNPL can lead to overspending and unnecessary debt,” Latham said. “Missed payments may result in hefty fees or hurt your credit score. Additionally, rigid terms can make it difficult to adjust or cancel your plans without penalties.”
The Bottom Line
If used responsibly, BNPL can be a great way to break up the cost of an expensive vacation. But it can also harm your finances if you can’t afford to keep up with payments.
“Use BNPL sparingly and only if you’re confident in managing the payments without stretching your budget,” Latham said. “If you can qualify for a competitive rate, BNPL services can be a good alternative to credit cards because the fixed monthly payments help you keep your budget on track and avoid the temptation of just paying the minimum on your monthly credit card statement.”
Having a plan to pay off your trip in a timely manner is key if you decide to use BNPL.
“As a wealth advisor, I could see recommending using BNPL to book travel only if you have a clear plan to pay off the balance within the agreed timeframe, are confident in your ability to manage the payments and it fits within in your overall financial planning strategy,” said Jake Falcon, founder and CEO at Falcon Wealth Advisors.
“It’s essential to read the terms and conditions carefully, and ensure that the BNPL option you choose is transparent about any fees or interest rates,” he continued. “For those who are disciplined with their finances, BNPL can be a useful tool to make travel more accessible and affordable. It’s best to run this by your advisor to confirm that everything lines up with your holistic financial plan before pulling the trigger.”
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