Money & The Economy

Why Buy Now, Pay Later is an Increasingly Popular Payment Arrangement

Today, more and more people are choosing to buy now, and pay later. Even with so many different payment options available, buying now, pay later makes perfect sense for a variety of reasons. In this article, we will look at why more people are choosing this option and how it can be beneficial.

What is Buy Now, Pay Later?

Buy now, pay later is an arrangement that allows consumers to pay for an item or service over time after they have received it. By spreading the cost of something over several months or a year, you can avoid paying the full purchase price at one time. Instead, you make several smaller payments over the course of months or a year that are easier on your budget. There are many different companies that offer buy now, pay later options to their customers.

How Does Buy Now, Pay Later Work?

If you buy now, pay later, you buy a product or service from a retailer and pay for it over a period of time in equal monthly installments. For example, if you spend $200 on a smartphone and want to spread the cost out over the month, you could potentially choose to make monthly payments of $20 over a period of ten months. Once all payments are complete, you own the phone and have completed the arrangement.

You May Not Undergo A Hard ‘Credit’ Check

Customers who buy now, pay later oftentimes do not need to undergo a ‘hard’ credit check. That is a benefit, because credit scores are typically used to qualify buyers for loans and other financial products, which, when done too often, impacts your credit score and thus your ability to borrow funds in the future. With the hard credit checks usually required with more traditional financing arrangements, it is beneficial to avoid those in order to not damage your score.

Oftentimes, You Will Not Be Charged Interest

Many companies that offer buy now, pay later options will not charge you interest on the items you purchase from them. This is in contrast to many financing options where you will be charged interest for the time period you finance the item. With traditional financing, this can add a lot of money to the cost of a purchase over a period of time.

Oftentimes, There Are No Fees

Many operators that offer buy now, pay later also have no customer fees for their service. Oftentimes, the seller will pay a fee rather than the buyer. This is different from many financing options which require fees to be paid to use their services. These fees can add up and make the costs of some items more expensive to purchase than they were initially. By avoiding these fees, you can save yourself some money and make it more affordable to purchase the items you want.

You Can Spread The Cost Of An Item Over Time

If you have found the perfect item you want but do not have the funds immediately available to purchase it, there are companies that will allow you to buy it and pay it off over time. These types of programs can make it easier to buy luxury items without it having a huge impact on your budget at once. You however need to ensure that you will be able to afford your monthly payments and manage your paychecks. You can do this by making sure that the amount you will be paying each month is within your budgeting limits.

Who Offers Buy Now, Pay Later?

There are many providers that offer buy now, pay later today. One of the most well-known ones is Klarna. Klarna is accepted by many well-known stores, including Lenovo, Tommy Hilfiger, Calvin Klein, and many others. Another popular buy now, pay later option is provided by Affirm. Affirm is in partnership with Walmart, Best Buy, Target, and more. And these are just two of the many buy now pay later companies.

Availability in Online and In Physical Shops

While buy now, pay later is predominantly an online method, it is beginning to emerge at retail stores as well. This is great news for people who like to see their items personally before buying. If you are able to try out the items in person first, it will help you determine if they are right for you and the needs of your home and lifestyle.


While buy now, pay later comes with many advantages, there are a few cons to be aware of as well. For instance, there are no rewards like cashback when using the buy now, pay later payment method. You also must make sure not to miss any of your payments. Missing payments can negatively affect your credit score, which could make it much harder for you to obtain loans in the future. If you miss a payment or can no longer afford to make your monthly payments, it will not be accepted. You may also need to pay late fees.

There is also an overspending risk. You must make sure to monitor how much money you are paying and pay the right amounts. If you refund your items, canceling your buy now, pay later method can be a challenging process.

In Conclusion

The advantage of buy now, pay later is that it allows you to make payments for your purchases over a period of months. It may help if you manage your budget to be able to make these payments, as otherwise you may be subject to late fees, harm your credit score, and so on.

There are oftentimes no hard credit checks or interest fees when using buy now, pay later. There are many buy now, pay later providers. Some of those include Klarna and Affirm. Although buy now, pay later comes with many advantages, there are also disadvantages, as there are with any payment method. Regardless, buy now, pay later is becoming increasingly popular as a payment option for many different items.

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Carl Fox

Carl Fox is the senior money and finance writer for Conservative Daily News. Follow him in the "Money & The Economy" section at CDN and see his posts on the "Junior Economists" Facebook page.

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