Buy now, pay later, or BNPL, is a payment plan that lets you break up your total purchase at checkout into a series of smaller installments.
Though these plans aren’t new, they’ve recently catapulted into the mainstream, with major U.S. retailers like Amazon, Walmart and Target now offering them. But with promises of convenience, zero interest and minimal fees, many shoppers are wondering, “What’s the catch?”
It could be your credit.
BNPL providers don’t typically report on-time payments to the major credit bureaus, so unlike with credit cards or loans, you can’t build credit with this type of financing. Some providers will report missed payments, though, which could end up hurting your score.
BNPL AND THE CREDIT BUREAUS