3 Little-Known Perks of Using 'Buy Now, Pay Later' Wisely

If you want to make a purchase, do you turn to cash, a check, or a credit card? If you're making that purchase today, you have another option: buy now, pay later (also known as BNPL).

This payment method has been around for a long time, but in its current form, some of the biggest names in the business (such as Affirm and Afterpay) came into existence just about a decade ago. Despite the ubiquity of BNPL, it's actually fallen in popularity among Americans as of late. In fact, 35% of those surveyed by The Ascent about BNPL services reported using it to make a purchase -- down from 50% in 2022 and 56% in 2021.

Unfortunately, some people also reported getting into trouble with it -- 26% reported missing a payment. BNPL services can make it a little bit too easy to spend beyond your means, since you're only paying for a portion of your purchases initially, and then making payments on the rest of your tab. But using BNPL carefully can offer you access to a few sweet perks. Here's how.

1. 0% financing -- with no credit check

In most instances, if you want to finance a purchase with 0% APR (be it in the form of a credit card or a traditional loan), the lender would request your personal information to complete a credit check. And it would be a hard credit check, which impacts your credit score and can cause it to fall by a few points.

While your credit score will recover, the nice thing about BNPL plans is that some companies that offer the service don't require a credit check at all. And if you can make your payments on time and in full (this is absolutely crucial to do), you'll effectively get 0% financing on a purchase you can't afford to pay for all at once.

2. Straightforward repayment terms

Credit cards can be useful financial tools, but one quality that makes them a little confusing is how the payments work. It's best to pay off your card balance in full every month to avoid paying interest and going into debt. But when you receive your monthly card statement, you'll see that the only payment you are required to make is a minimum amount based on your balance. Of course, only paying the minimum benefits your card issuer because it'll make more money off of you thanks to interest charges.

BNPL payments work differently. When you buy something using this kind of loan, your total cost is typically split into a few equal payments. You owe the first one at checkout, then you make the others on a set regular basis (such as every two weeks) until the purchase is paid off. Taking advantage of easy repayment terms can be a definite perk of BNPL.

3. Convenient access

I've been surprised lately to see how many retailers and other entities are offering BNPL payment options -- access to them used to be limited to some online merchants. But big-name retailers with both online and physical presence are partnering with BNPL companies to allow consumers to make purchases in store using this payment method, including Pottery Barn, Target, and Macy's.

I love online shopping and will nearly always opt to make a purchase via a company's website rather than visiting its physical store. But for people who do more of their buying in person, BNPL offers convenient access to a different way to finance purchases. And you can even pay for travel using BNPL now -- not that I recommend it.

If you have a good handle on your finances and can be sure that you'll be able to make your BNPL payments, using this payment method comes with some decent perks. Just be sure you can keep track of what you owe and fully repay it to get the most benefit.