Buy Now, Pay Later

While BNPL is growing in popularity, it’s unlikely to replace credit cards entirely as a primary form of borrowing. Credit cards are much more versatile and offer long-term flexibility — like revolving credit, rewards programs, and the ability to make larger purchases and carry a balance over time. BNPL is mostly limited to specific purchases, typically requiring you to pay off the debt within a short period — usually 6–12 weeks. It’s an easy way to manage a small purchase, but it’s not designed to be a long-term solution like credit cards.

For example, if you’re planning a large family vacation, you’re more likely to rely on your credit card for those expenses, as it provides both flexibility and travel rewards. BNPL is more suited for individual, smaller e-commerce purchases, like buying a new pair of shoes or paying for a meal delivery service.

BNPL Usage in Recent Years

BNPL usage has surged, especially in the past few years, as consumers are given the option at checkout when making online purchases and for those looking for alternatives to traditional credit cards. People are trying to avoid high-interest rates or taking on too much credit card debt. They can use BNPL to purchase a new mattress, splitting payments into smaller, interest-free chunks, instead of putting the whole amount on a higher-interest credit card.

This shift suggests that consumers are increasingly looking for short-term, low-cost borrowing options that don’t accumulate high interest rates. As inflation rises, people are looking for more budget-friendly ways to finance purchases.

Economic Conditions

Economic conditions that make BNPL more appealing are credit cards with high APRs, inflation, access to credit and growing use of e-commerce for purchases.

High interest rates on credit cards

Credit card rates are hitting 20% or more. For someone who needs to make a big purchase, BNPL can feel like the smarter choice — especially when it offers 0% interest if paid off on time.

Inflation is still a problem

Groceries, gas, utilities — you name it, cost more. If your paycheck isn’t stretching as far, spreading payments out over a few weeks might be the only way to make a purchase without dipping into savings or racking up debt.

Younger consumers either don’t qualify for credit cards or don’t want to get into revolving debt. BNPL sidesteps credit checks and offers fast approvals, which makes it accessible — even for people with thin or no credit history. In addition, some consumers have already maxed out their credit cards and BNPL provides an opportunity to purchase without requiring cash up front.

Increased e-commerce spending

Online shopping continues to rise, and BNPL is often seamlessly integrated into checkout pages. The convenience and immediate gratification of BNPL align well with the habits of mobile-first shoppers, particularly Gen Z and Millennials who are already accustomed to flexible digital payment options.

Consumer Protections

Consumer protection is one of the biggest differences between BNPL and credit cards — and it’s something most people don’t think about until there’s a problem.

Credit cards come with established safeguards: fraud protection, chargeback rights, and the ability to dispute a charge if something goes wrong with a purchase. BNPL? Not so much. These services are newer, less regulated, and the protections vary widely depending on the provider.

Let’s say you buy something that arrives damaged or never shows up. With a credit card, you can usually file a dispute and stop the charge. With BNPL, you might be stuck dealing directly with the merchant or continuing to make payments on something you never received — unless the BNPL provider offers some kind of protection (and even then, it’s often vague).

If you’re buying something expensive, returnable, or from a retailer you haven’t used before, a credit card is the smarter bet. BNPL can work well for small, routine purchases — but understanding what you’re giving up in terms of protection.

Risks of Relying on BNPL

The biggest risk with BNPL is how easy it makes overspending feel. Splitting a purchase into smaller payments sounds manageable — but if you’re not tracking it, those small chunks can add up fast. Miss a payment, and you could face fees or even a hit to your credit score. And unlike credit cards, BNPL doesn’t offer much flexibility. Once you agree to a plan, you’re locked in. There’s no option to just pay a minimum and carry a balance. I’ve seen clients get caught in this — stacking multiple BNPL plans at once, thinking it was under control — until all those due dates started landing at the same time. It can spiral quickly if you’re not organized.

The Future of BNPL

BNPL isn’t going anywhere — it’s already reshaping how people think about spending. I see it becoming a more permanent fixture in the consumer lending landscape, especially as younger consumers move away from traditional credit cards and look for financing options that feel more flexible and transparent.

That said, I think we’ll see two big shifts: more regulation, and more integration. Regulators are paying closer attention to how these services affect consumer debt and transparency. At the same time, we’re already seeing BNPL baked into checkout experiences — both online and in-store — and that’s only going to grow.

For retailers, it’s a powerful tool to drive sales. For consumers, it can be helpful — but only if they use it with eyes wide open. Long term, I think BNPL will sit somewhere between a credit card and a short-term loan, and how well consumers navigate that space will come down to education and better oversight.