Buy now, pay later (BNPL) services like Klarna, Afterpay, and Affirm have exploded in popularity by offering shoppers a simple promise: get what you want now and pay for it later in smaller installments. But according to finance influencer Vivian Tu, that convenience may be creating unhealthy money habits that can quietly impact your financial health in the long run.
In a recent Instagram video, Tu argued that BNPL services encourage consumers to focus on whether they can afford a small payment rather than whether they can afford the purchase itself. That mental shift when checking out with buy now pay later apps can make spending feel less significant. Instead of asking, "Can I afford this $200 item?" shoppers should rather ask themselves, "Can I afford four payments of $50?"
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Buy Now Pay Later vs. Layaway: What's the Difference?
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In many ways, BNPL is the modern evolution of layaway, a payment method that was especially popular in the 1980s and 1990s. With layaway, consumers made payments over time before taking an item home. The system helped shoppers budget without taking on debt because they didn't receive the product until it was fully paid off. Today, BNPL offers a 180-day approach: consumers receive the item immediately and worry about the payments later.
The Hidden Financial Risks of Buy Now Pay Later
Research highlighted by the American Psychological Association reveals pay-later services as a growing source of financial stress. When consumers don't experience the full financial impact of a purchase right away with these finance tools, they're more vulnerable to overspending and accumulating multiple payment obligations. That "out of sight, out of mind" approach can come back to haunt you.
Photo by seksan Mongkhonkhamsao on Getty Images
Many BNPL plans offer interest-free installments and are marketed as a smarter alternative to credit cards, but splitting purchases into smaller payments can create a false sense of affordability. Those small payments spread across different purchases can quickly add up, making it harder to track spending. Some BNPL providers have begun reporting payment activity to credit bureaus, which could affect your credit score. Overall, studies and consumer surveys have repeatedly linked BNPL usage with overspending, missed payments and higher levels of financial stress.
Before You Use Buy Now, Pay Later Services
Vivian Tu encourages consumers to focus on the full price tag rather than the installment amount. Building wealth often requires delayed gratification, intentional spending and saving before buying. BNPLs flip that formula by rewarding immediate consumption.
The behaviors associated with a BNPL mindset blur the line between what you can afford today and what you may struggle to pay for tomorrow. Next time you're prompted to split payments with buy now pay later apps like Klarna, Affirm or Afterpay, ask yourself: is this purchase worth it in the first place?
Related: Read more about Vivan Tu's financial advice for travelers:
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
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