Why “buy now, pay later” is a bad idea

People are likely to buy more when buying is really easy. People are also likely to buy more when we kick the burden of payment down the road so that our future selves can deal with it. No one knows this better than online retailers.

“Buy now, pay later” services like Afterpay, Klarna, Affirm, and Sezzle do a really good job of increasing spending by making buying seem so easy. Anything this good for stores cannot be good for consumers.

Many of these services advertise that they do not report to credit bureaus. That sounds nice at first, but paying late can still hurt your credit score. And paying on time won’t get you any credit in the form of good credit.

Bottom line: Buy now, pay later has all the risks of credit cards with none of the rewards. Read the fine print if you have to, but you’re better off just staying away.