2025 V3 Article - Ask a Money Guide

Q: Is it ok to use Buy-Now, Pay-Later products when I’m buying things online or in store? Is it better or worse than a credit card?

Buy Now, Pay Later (BNPL) can seem like a convenient option, especially when shopping online. However, it’s important to understand how it works compared to a credit card. 

In terms of access, BNPL is pretty simple. These services often break up your purchase into a few interest-free payments without requiring a credit check. This could be helpful if you’ve already budgeted for the item and want to spread out the cost, or if you don’t have access to a credit card. However, easy access to BNPL can encourage impulse spending, and missing a payment could mean steep late fees or damaging your credit. Also, it’s easy to lose track if you’re using multiple plans at once.

Credit cards, on the other hand, offer more protection for returns or fraud, and if you pay your balance in full each month, you avoid interest. They also help build your credit history, which BNPL usually doesn’t, unless something goes wrong and is reported to credit bureaus with a negative impact.

So, which is better? It depends on your situation and your goals. It’s best to utilize a budget to help you decide when and how to make purchases that align best with your financial goals, and use tools like a credit card or BNPL for flexibility as needed. 

If you would like to talk about your goals, make a budget, or review your credit report, make a free appointment with a Money Guide to help you.

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