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As holiday shopping ramps up, more Americans are turning to Buy Now, Pay Later (BNPL) services that split up purchases into smaller, timed installments.Adobe Analytics predicts that more than $20 billion in online holiday purchases will be made with BNPL this year. “Customers really like them because it really enables you to be a lot more flexible with how you’re spending your money,” said Jessica Roy, a personal finance columnist for our Hearst partners at the San Francisco Chronicle. While these short-term loans offer convenience at checkout, financial experts warn they aren’t risk-free. In May 2024, the Consumer Financial Protection Bureau (CFPB) issued an interpretive rule that sought to apply credit-card style protections — such as dispute resolution and billing requirements — to certain BNPL providers.In May 2025, the bureau announced it would not prioritize enforcement of the rule, citing shifting policy focus. That decision has left many consumers with inconsistent protections. Roy notes that if you have access, a credit card can offer similar flexibility to BNPL. If you pay your card off in full each month, you’re essentially getting six to eight weeks to pay for your purchases. However, for many Americans, credit cards may not be an option. Federal Reserve research shows BNPL is often used by people with limited savings or credit, who say it is in the only way they can afford a purchase.”Overwhelmingly, it is young people,” Roy said. “It is people of color. It is people with poor credit, or no credit, and people who are otherwise in different types of debt. So, it’s the type of people who generally shouldn’t be going into more debt.” While BNPL can help shoppers manage one-time expenses, experts warn it can easily lead to overextension — especially when users juggle multiple plans at once. A study by Motley Fool Money found that more than 25% of Americans regret using BNPL due to unexpected costs, and nearly 24% of users have missed payments. “One of the big pitfalls with these is that a lot of people who use them tend to rack up a bunch,” Roy said. “Most people don’t only take out one and totally pay it off. They wind up having five, 10, 15.” That kind of stacking can be risky. Missed payments may trigger late fees — and in some cases interest charges — potentially causing a debt snowball for those already living paycheck to paycheck. If you do choose to use BNPL, Roy advises doing so thoughtfully and not using it to spend more than you can realistically afford. “If you’re like, my child wants one big gift for Christmas, the best way to make that work with my budget is to divide that payment up, and you’re really disciplined about it… I don’t think that’s the worst thing in the world,” Roy said. “I think that can make sense for people.” Ultimately, it’s up to shoppers to read the fine print and make sure “pay later” doesn’t mean paying more.
As holiday shopping ramps up, more Americans are turning to Buy Now, Pay Later (BNPL) services that split up purchases into smaller, timed installments.
Adobe Analytics predicts that more than $20 billion in online holiday purchases will be made with BNPL this year.
“Customers really like them because it really enables you to be a lot more flexible with how you’re spending your money,” said Jessica Roy, a personal finance columnist for our Hearst partners at the San Francisco Chronicle.
While these short-term loans offer convenience at checkout, financial experts warn they aren’t risk-free. In May 2024, the Consumer Financial Protection Bureau (CFPB) issued an interpretive rule that sought to apply credit-card style protections — such as dispute resolution and billing requirements — to certain BNPL providers.
In May 2025, the bureau announced it would not prioritize enforcement of the rule, citing shifting policy focus. That decision has left many consumers with inconsistent protections.
Roy notes that if you have access, a credit card can offer similar flexibility to BNPL. If you pay your card off in full each month, you’re essentially getting six to eight weeks to pay for your purchases.
However, for many Americans, credit cards may not be an option. Federal Reserve research shows BNPL is often used by people with limited savings or credit, who say it is in the only way they can afford a purchase.
“Overwhelmingly, it is young people,” Roy said. “It is people of color. It is people with poor credit, or no credit, and people who are otherwise in different types of debt. So, it’s the type of people who generally shouldn’t be going into more debt.”
While BNPL can help shoppers manage one-time expenses, experts warn it can easily lead to overextension — especially when users juggle multiple plans at once. A study by Motley Fool Money found that more than 25% of Americans regret using BNPL due to unexpected costs, and nearly 24% of users have missed payments.
“One of the big pitfalls with these is that a lot of people who use them tend to rack up a bunch,” Roy said. “Most people don’t only take out one and totally pay it off. They wind up having five, 10, 15.”
That kind of stacking can be risky. Missed payments may trigger late fees — and in some cases interest charges — potentially causing a debt snowball for those already living paycheck to paycheck.
If you do choose to use BNPL, Roy advises doing so thoughtfully and not using it to spend more than you can realistically afford.
“If you’re like, my child wants one big gift for Christmas, the best way to make that work with my budget is to divide that payment up, and you’re really disciplined about it… I don’t think that’s the worst thing in the world,” Roy said. “I think that can make sense for people.”
Ultimately, it’s up to shoppers to read the fine print and make sure “pay later” doesn’t mean paying more.
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