What Is Buy Now, Pay Later?

How Does Buy Now, Pay Later Work?

BNPL plans let you make a purchase upfront and pay for it over time. A type of installment loan, BNPLs come with fixed, predictable payments over a specified loan term.

Also known as point-of-sale or pay-in-four loans, BNPL is available at checkout at participating retailers, in store or online. Some BNPL providers even offer debit cards so you can use their service anywhere.

BNPL terms vary, but a common structure breaks purchases into four equal payments due every two weeks. The first payment is due at checkout, and the following three payments are spread over the subsequent six weeks.

In general, BNPL plans don't charge interest. But if you miss payments, you may face interest charges and late fees. To avoid this, you can often link your bank account or debit card to your BNPL plan and enable automatic payments.

Typically, there's no hard credit check when you apply for BNPL plans. But just because these loans are relatively easy to get doesn't mean they're foolproof. While BNPL can be a helpful way to reduce immediate strain on your bank account, don't use it without a solid plan to avoid accumulating payments you may not be able to keep up with.

How to Use Buy Now, Pay Later

Using buy now, pay later can look a little different depending on the provider you use. But you'll follow these general steps:

1. Confirm the retailer offers BNPL. Popular BNPL services include Affirm, Afterpay, Sezzle and Paypal Pay in 4. Look for these names at checkout in brick-and-mortar stores or on the checkout page when shopping online. Some services, such as Afterpay, let you download an app you can use to pay, similar to Apple Pay.
2. Apply and get approved. If you're a returning customer, you'll usually just need to log in to your account with your phone number to apply for a loan. If you haven't used a BNPL service before, you'll need to register for an account. You'll also need to provide information to prove your identity, such as your date of birth and phone number. Finally, you'll link a bank account or a debit card for making payments. (You may be able to use a credit card, but not all card issuers allow it.)
3. Review the loan terms. BNPL loans have varying payment structures—and some even offer a range of plans to choose from—so it's important to read the terms carefully. Make sure you understand payment terms, fees and interest rates, if applicable.
4. Make payments. After completing your purchase, make sure you pay the installments on time. Enroll in autopay and put payment reminders in your calendar to ensure you have enough funds in your account.

How Much Does BNPL Cost?

BNPL costs and fees vary by provider, so read the terms before you apply. The following table shows interest rates, late fees, and loan terms for some of the most common BNPL plans as of December 2025.

Buy Now, Pay Later vs. Credit Cards

Like BNPL, credit cards allow you to make purchases upfront and pay for them down the road. But these two financing methods have some crucial differences to be aware of.

Unlike credit cards, BNPL doesn't usually require a hard credit check and is generally easier to qualify for. BNPL is a type of installment loan that you repay with a series of equal payments, and each time you use BNPL, you set up a new agreement with its own terms. Another unique characteristic of BNPL? Typically, you don't pay any interest. But there may be late fees if you miss payments.

On the other hand, credit cards are a type of revolving credit, which allows you to borrow repeatedly up to a set credit limit while making minimum payments. In that same vein, credit cards have a single borrowing agreement, and you are required to pay your bill once each month, regardless of how many purchases you've made. Unlike BNPL, credit cards charge interest on purchases that aren't paid off within a billing cycle. On the plus side, credit cards typically offer rewards, purchase protections and travel protections that BNPL does not.

Pros and Cons of Buy Now, Pay Later

BNPL can be useful in some situations, but there are disadvantages to be aware of. Consider these pros and cons of BNPL before using it:

Should You Use Buy Now, Pay Later?

Whether or not you should use buy now, pay later comes down to your goals in financing a purchase, along with your individual situation.

Consider BNPL if:

• You use a budget to manage your money. You should be very confident you'll be able to make future payments before using BNPL to avoid late fees or interest. This involves planning ahead and earmarking funds for future installments.
• You want to borrow interest-free. BNPL can be advantageous by sparing you interest charges, which can really add up. If you can manage the payment terms, this can help you save money compared to taking out a personal loan, for example.
• You're making a large purchase and want to spread out payments. BNPL can take some of the sting out of a major purchase by spreading it over several weeks or months. This can allow you to set aside money each week or pay period to cover your purchase.

Consider an alternative if:

• You're tempted to use BNPL for lots of small purchases. Each time you use BNPL, you open a new loan with its own terms and due dates you'll need to track. For this reason, BNPL generally isn't worth it for small, frequent purchases, such as takeout.
• You care about maximizing credit card rewards. Credit cards can provide perks beyond borrowing, such as travel rewards and purchase protections. Using BNPL in place of a rewards credit card means sacrificing these perks.
• You aren't sure you'll have the cash for future payments. If you're not sure you'll be able to make all of your BNPL payments, avoid using it. Missed payments can lead to fees and, potentially, interest charges.

Tip: Though BNPL isn't the same thing as paying with a credit card, you do have some legal protections when using these services. A Consumer Financial Protection Bureau (CFPB) ruling states that consumers have the right to dispute charges and demand refunds from lenders after making a return with BNPL. However, you'll also need to work within the seller's return policies.

Alternative Financing Options

While BNPL can help you finance a purchase, alternative borrowing options have features worth considering. Keep in mind that these alternatives typically take more time to apply and be approved for, and often require a hard credit check. If you have no credit or a low credit score, you may have difficulty getting approved.

0% Intro APR Credit Card

A 0% intro annual percentage rate (APR) credit card can help you finance purchases and then pay down the balance over time without accruing interest during the introductory period. But any balance remaining when the intro period ends will be subject to the card's standard APR.

Rewards Credit Card

A rewards credit card can help you finance a purchase while earning cash back, points or miles on your purchases. In addition to getting more out of your spending, responsible credit card use can help you build credit.

Learn more: How to Use a Credit Card to Build Credit

Low-Interest Personal Loan

A low-interest personal loan can be a smart option for financing large purchases if your credit score qualifies you for good terms. While you'll pay interest on a personal loan, rates are often lower compared to credit cards, and you can often borrow up to tens of thousands of dollars.

Frequently Asked Questions

The Bottom Line

Buy now, pay later lets you make a purchase and pay for it over time—typically without interest charges. Similar to a personal loan, BNPL requires regular installments to repay your purchase, often spaced two weeks apart. While BNPL can be a quick and cost-effective way to spread out the financial impact of a purchase, it has its limitations. If you use BNPL, make sure you keep a close eye on your budget to avoid late payments.

If you decide to go with a credit card or personal loan over BNPL, having good credit will make it easier to qualify. Check your FICO^® Score^Θ for free from Experian and find ways to improve it.