The Hidden Downsides Of Using Buy Now, Pay Later Services

Besides not getting rewarded figuratively by the credit bureaus for your good buy now, pay later payment history, you also won’t get any literal rewards. As in airline miles, flexible points, or plain ol’ cash back that you might snag if paying with an appropriate credit card. Considering that the average BNPL purchase amount is $50 to $1,000, that can be a nice chunk of points to forgo.


Some BNPL lenders actually accept credit cards for payment of the installments, which would allow you to get rewards for the purchase after all, but that adds another layer of risk and complication. A borrower might satisfy the BNPL loan with no fees or interest by redirecting the expense to a credit card, only to rack up a credit card balance you’re unable to pay in full.

Keep in mind that if purchasing with a credit card directly, there’s a grace period of several weeks between when the charge is made and when you’re required to pay the bill. That period can be even longer if you’re able to time the purchase to occur at the very beginning of the statement period. Between the time it takes for the statement period to come to an end and the grace period that follows, you could delay having to pay — or having to pay any interest — by approximately six or seven weeks. That’s nearly as much time as the traditional BNPL pay-in-four structure and more than enough time to receive an additional three or four paychecks.