"Buy Now, Pay Later" (BNPL) services have exploded in popularity, offering consumers an easy way to split purchases into smaller, interest-free installments. Companies like Klarna, Afterpay, and Affirm have made it possible to finance everything from clothing and electronics to groceries and takeout. While BNPL can be a helpful tool for managing large, planned purchases, an alarming trend has emerged—people are increasingly using these services for everyday expenses, like food delivery, groceries, and restaurant meals.
At first glance, spreading out payments may seem like a smart way to manage cash flow, but financial experts warn that this habit can encourage overspending, create hidden debt, and even lead to financial instability. In this article, we’ll break down the risks of using BNPL for daily expenses and provide smarter alternatives to help you stay financially healthy.
The Risks of Using BNPL for Everyday Purchases
1. Encourages Overspending & Impulse Buying
BNPL services make it easy to rationalize unnecessary purchases by splitting the total cost into smaller payments. For example, a $60 food delivery order might feel like a small $15 expense spread over four weeks—but if you make multiple purchases like this, the payments can quickly pile up.
📌 Example: A Klarna user finances five DoorDash meals a week, each costing around $50. Instead of feeling the full $250 impact upfront, they pay just $62.50 per week. By the time they finish paying off one order, another new order is being financed—creating an ongoing cycle of debt.
💡 Solution:
Use a "cash-only" rule for food and other non-essential expenses. If you don’t have the money available immediately, reconsider the purchase.
Try budgeting apps like YNAB (You Need a Budget) or EveryDollar to allocate funds wisely instead of relying on installment plans.
2. Hidden Fees & Financial Penalties
While BNPL services market themselves as "interest-free," many of them charge late fees, penalties, and other hidden costs if payments are missed. Some even increase the cost of future purchases based on past repayment behavior.
Klarna charges up to $7 per missed payment, and if payments are late multiple times, the account may be blocked from further purchases.
Afterpay applies a $8 late fee per missed installment, with additional penalties if the balance remains unpaid.
Affirm does not charge late fees but does charge interest (up to 36%) on some installment plans, which can make purchases significantly more expensive over time.
💡 Solution:
If you must use BNPL, set up automatic payments to avoid missing due dates.
Instead of BNPL, consider cashback credit cards that offer rewards with no interest if paid in full each month (e.g., Chase Freedom Flex or Discover It Cash Back).
3. No Credit-Building Benefits
One major downside of BNPL services is that they typically do not help you build credit. Unlike credit cards, which report payments to credit bureaus, many BNPL providers only report negative behavior (like missed payments).
Klarna, Afterpay, and Affirm do not report positive payment history to major credit bureaus.
If a payment is missed, your debt could be sent to collections, damaging your credit score.
💡 Solution:
If you need financing, use a credit card with 0% APR introductory offers and pay off the balance within the promotional period.
Consider using a secured credit card if you want to build credit while maintaining financial discipline.
4. The Debt Snowball Effect
Many users finance multiple purchases simultaneously, making it difficult to track payments. Because BNPL services do not function like traditional credit cards, it’s easy to lose track of how much you actually owe.
📌 Example: A shopper makes five BNPL purchases in a month—financing a clothing haul, a grocery order, two food deliveries, and an online subscription. Each payment plan is manageable on its own, but when combined, they create an overlapping cycle of payments that never seem to end.
💡 Solution:
Use a budgeting spreadsheet to track all BNPL purchases and ensure payments don’t overlap.
Limit yourself to one BNPL purchase at a time—and pay it off before making another.
Smarter Financial Alternatives to BNPL
Instead of using Klarna, Afterpay, or Affirm for everyday expenses, consider these healthier financial habits:
1. Use a Zero-Based Budget
Allocate every dollar of your income toward specific expenses so you know exactly how much you can afford for non-essentials. Apps like Mint, YNAB, or EveryDollar can help you track spending.
2. Try the "24-Hour Rule" for Non-Essential Purchases
Before making an impulse purchase (especially for food delivery or online shopping), wait 24 hours to determine if it’s truly necessary.
3. Choose a Reward-Based Credit Card Instead
If you need flexibility, a credit card with cashback or rewards can offer similar benefits to BNPL but with additional perks—as long as you pay the balance in full each month. Recommended options:✅ Chase Freedom Flex – 5% cashback on rotating categories✅ American Express Blue Cash Everyday – 3% cashback on groceries
4. Build an Emergency Fund
If you're using BNPL because you struggle to cover essential expenses, focus on building an emergency savings fund instead. Even saving $500-$1,000 can prevent you from relying on installment plans for basic needs.
5. Use Prepaid or Debit Cards
For those who struggle with overspending, using a prepaid debit card can help limit purchases to only the funds available—preventing the risk of debt accumulation.
While Klarna, Afterpay, and Affirm offer convenience, using BNPL for everyday expenses can lead to financial pitfalls like overspending, late fees, and debt accumulation. Instead of relying on installment plans for food delivery, groceries, or minor purchases, consider smarter financial strategies like budgeting apps, cashback credit cards, and emergency savings funds.
By making mindful spending choices, you can maintain financial stability without falling into the BNPL debt trap.
💬 What’s your take? Have you used BNPL for everyday expenses? Share your experience in the comments below!
Comments