According to the 2024 Christian Financial Health Report, 43% of Christians used a buy now, pay later service during the past twelve months. Pay Later (BNPL) services have become increasingly popular, allowing consumers to purchase items immediately and pay for them in installments.

Companies like Afterpay, Klarna, and Affirm have gained widespread traction, especially among younger shoppers, as an alternative to traditional credit cards. But while BNPL services may seem like a convenient way to spread out payments, using them can lead to significant regret. Here are five reasons why you should think twice before using Buy Now, Pay Later services.

1. High Interest and hidden fees.

Yes, these services advertise themselves as having “no fees” or “no interest,” but that is not entirely true. Depending on the service provider, repayment terms that go beyond four months can include a significantly high interest rate. Additionally, the “no fees, no interest” claim usually assumes on-time payments. If a payment is late or missed, fees and interest are often applied. It is important to note that 64% of Christians who used buy now, pay later services missed a debt payment during the last twelve months. This means BNPL users are vulnerable to these rates and fees. 

2. Encourages impulse buying.

Proverbs 21:20 says, The wise store up choice food and olive oil, but fools gulp theirs down” (NIV). The desire for immediate gratification is often a heart issue that results in financial struggles. Unfortunately, the BNPL industry encourages immediate gratification. Many choose to use buy now, pay later services because they cannot afford to purchase the item in full. Instead of saving for the item or waiting until their finances can support the purchase, BNPL services allow the item to be acquired immediately. Using these services can perpetuate poor financial behaviors.

3. Debt can spiral out of control quickly.

Debt tends to be an issue for BNPL users. According to the Christian Financial Report, 82% of BNPL service users also had credit card debt. BNPL payments stack up quickly. Because these services create a façade of affordability, users continue to make purchases and cannot afford the numerous monthly payments.

4. Lack of transparency.

As the saying goes, the devil is in the details. While the services may tout “no interest” or “no fees,” the small print often says otherwise. The absence of interest fees applied if you only meet specific conditions. As already mentioned, the service providers may tack on fees and interest if payments are late or missed.  

5. Creates a false sense of financial health.

Buy now, pay later services may seem like they can help you manage your monthly budget more easily by breaking the purchase into payments. But this is a mental trick to create a false sense of financial health. Breaking down the purchase amount into smaller payments does not mean that the consumer can actually afford the purchase. In fact, the purchase, even when broken down into monthly, can increase financial stress and risk. BNPL services mask the fact that you are living beyond your means.

Buy now, pay later services may seem like a convenient way to spread costs over several months, but the downside to these services is significant. They increase debt, can quickly overwhelm the budget, and result in additional fees and interest costs.

Before using a BNPL service, take a moment to reflect on your motivations. Why can't you wait until you can afford the purchase? Does the decision align with principles of biblical stewardship? Consider an alternative approach: set aside the amount you would pay each month into a savings account until you’ve saved enough to make the purchase without relying on debt.