Buy Now, Pay Later—With No Regrets

Extended payment plans can help ease the sting of a big-ticket purchase. But beware of costly missteps that can add to your price.

- KERRI ANNE RENZULLI

WHEN Stephanie Rogers needs to make a big purchase for Christmas or an upcoming trip, she turns to a convenient tool handily located at the checkout of nearly all online retailers these days: buy now, pay later plans.

Offered by companies such as Affirm, Afterpay, Klarna and PayPal, these financing services split the cost of purchases into equal installments over a few weeks, usually with no interest charges.

“It seemed like a no-brainer to try it,” says Rogers, 51, a medical retail worker in Troy, Mo. “I like to spread out my payments for cash flow purposes.”

Buy now, pay later plans have been popular among younger generations—millennials and Gen Zers—for a while, but lately BNPL has been taking off among the over-50 crowd, too. Afterpay says the number of orders it receives from older shoppers has been rising recently, and 13% of baby boomers and 28% of Gen Xers have used one of these plans, according to a 2022 survey from financial services company Motley Fool. Higher earners have been adopting this payment option as well, with nearly one-third of those earning $100,000-plus now using BNPL, a recent Bankrate study found.

“The conventional wisdom was that young people without much money and without much credit were using BNPL,” says Ted Rossman, a senior industry analyst at Bankrate. “There’s still some of that, but BNPL has also moved upmarket.”

Buy now, pay later plans can be a useful way to get extra time to pay off purchases, especially expensive ones, without incurring interest. Those are the top reasons consumers, especially older shoppers, cite for using the services, Bankrate found. Younger shoppers were more likely to also appreciate the easy credit-approval process.