Are Buy Now, Pay Later Programs Horrible For Your Wallet?

While apps like Klarna offer layover programs...is it really beneficial to use them?

Moment of Truth: From the instant I first heard the word “Klarna,” my spending habits went completely kablooie. Like the “Buy Now, Pay Later” services Afterpay, Sezzle, and Zip Co, Klarna has been a death sentence for my wallet. 

I guess I have some mild comfort in knowing I’m not the only one who’s gone a bit too crazy with Buy Now, Pay Later (BNPL) programs. According to Nerd Wallet, 33% of Americans have used these programs in 2024 alone. 

Programs like Klarna and Afterpay give you the ability to pay for purchases in four to six installments. Everything from clothes to cosmetic services and even groceries can be paid for using BNPL plans. 

While they can be extremely tempting when it comes to our shopping sprees and inhibited spending, they’re often short-sighted and can be detrimental to your financial well-being in the long run. 

Here’s why you might want to think twice before overdoing it with the BNPL systems.

Programs like Klarna and Sizzle reinforce poor spending habits 

  

Photo Credit: John Schnobrich (Unsplash)

Let’s be honest – you don’t need that entire cart full of Urban Outfitters ponchos. And you can certainly do without all those pumpkin spice scented candles perched in your Yankee cart. And do you really need to buy that Beetlejuice mug from Etsy, just because Halloween’s right around the corner?     

We all know that making the occasional frivolous purchase is the spice of life, programs like Afterpay, Klarna, and Sizzle blatantly encourage poor spending habits, since you get to slow down your payment into several installments over time. Although it may seem like you’re spending less in the short term, if you look at the bigger picture, you’re spending the same amount that you’d generally pay, just over a longer period of time.

It’s no secret that these BNPL schemes make us far more likely to hit the “Buy Now” button, without considering the long term consequences. 

And because programs like Klarna, Afterpay, and Sizzle make spending so tempting, it’s easy to fall into a pattern of spending that feels like addiction, especially when making large purchases that you’d ordinarily balk at.  

Use at your own risk.

You’ll feel more comfortable buying things you don’t need

Photo credit: Megan Bucknall

No, no – take the Dunder Mifflin coffee mug out of your Etsy shopping cart. Remove those neon polka dot rainboots from the bag. And just because you saw Lily Collins rock a giant Teddy fur coat in the latest Emily in Paris episode doesn’t mean you automatically need to buy the exact same one.  

I only say this as someone who *knows* how tempting it is to make dumb purchases just because you have those BNPL schemes to soothe your buyer’s remorse. Some of my most frivolous purchases (okay, all of them,) have been made with Klarna’s help. 

Believe me. I once bought $600 worth of fancy over-the-top party dresses that I’ve worn a total of… well, a total of zero times since I bought them. (And that was over a year ago now. Each time I open my closet to see those dresses collecting dust, I still feel such a sense of shame I want to weep. Thanks a lot, Klarna.)  

Instant Gratification 

Photo Credit: Jon Ly (Unsplash)

It’s not exactly a secret that we live in the age of “instant gratification.” While it may feel like a huge, amazing endorphin rush to get all these goodies shipped to us with such “low payments” spread out over time, it’s extremely harmful and problematic to our psyches in the long run. 

In today’s world of instant gratification, we often forget what really matters and end up living empty lives filled with quick fixes. Technology keeps us hooked on fleeting pleasures, giving us a false sense of satisfaction. But true happiness and real relationships take time and effort. We feel more fulfilled when we work hard for what we want instead of falling for those Buy Now, Pay Later schemes that promise instant rewards but leave us wanting more.

It’s easy to lose track of how many purchases you’ve made over time that have been paid for via BNPL. It seems harmless in the short term, but over time, these out of control spending habits can easily add up. This can lead to debt if you’re not keeping track of your finances. 

BNPL schemes can negatively impact your credit score 

Photo Credit: George Bakos (Unsplash)

If you’re not careful with your payments, Buy Now, Pay Later programs can negatively impact your credit score. To avoid this, make sure you’re getting all your payments in on time for every installment. And if you miss payments, this can result in late fees and quickly snowball. No thanks!

Murder on your wallet in the long run

Often, Klarna, Afterpay, and Sizzle will make you feel a whole lot more comfortable spending hundreds, if not thousands of dollars on whatever it is that your heart desires. Yet at the end of the day, even if it’s done in installments, you’re still spending the same amount of money, but with interest and possible late fees. This is a surefire way to empty your wallet in no time. 

Late fees are high for Buy Now Pay Later Programs

It’s best not to miss a payment for these Buy Now Pay Later programs, unless you’re willing to pay a hefty price. Late fees can run up to 25% of your purchase, so consider if you’re in a financial position to risk this. 

Lack of financial discipline 

Photo Credit: Tristan Colangelo (Unsplash)

At the end of the day, having financial discipline is crucial. While I see no issue with spending big every once in a blue moon because it brings you joy, it’s wise to save those moments for special occasions, unless you’re financially comfortable enough to splurge.

Even if money isn’t a concern, practicing good spending habits is still valuable. It helps you secure your finances, steer clear of instant gratification traps, and ultimately enhances your well-being.

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Moment of Truth: From the instant I first heard the word “Klarna,” my spending habits went completely kablooie. Like the “Buy Now, Pay Later” services Afterpay, Sezzle, and Zip Co, Klarna has been a death sentence for my wallet. 

I guess I have some mild comfort in knowing I’m not the only one who’s gone a bit too crazy with Buy Now, Pay Later (BNPL) programs. According to Nerd Wallet, 33% of Americans have used these programs in 2024 alone. 

Programs like Klarna and Afterpay give you the ability to pay for purchases in four to six installments. Everything from clothes to cosmetic services and even groceries can be paid for using BNPL plans. 

While they can be extremely tempting when it comes to our shopping sprees and inhibited spending, they’re often short-sighted and can be detrimental to your financial well-being in the long run. 

Here’s why you might want to think twice before overdoing it with the BNPL systems.

Programs like Klarna and Sizzle reinforce poor spending habits 

  

Photo Credit: John Schnobrich (Unsplash)

Let’s be honest – you don’t need that entire cart full of Urban Outfitters ponchos. And you can certainly do without all those pumpkin spice scented candles perched in your Yankee cart. And do you really need to buy that Beetlejuice mug from Etsy, just because Halloween’s right around the corner?     

We all know that making the occasional frivolous purchase is the spice of life, programs like Afterpay, Klarna, and Sizzle blatantly encourage poor spending habits, since you get to slow down your payment into several installments over time. Although it may seem like you’re spending less in the short term, if you look at the bigger picture, you’re spending the same amount that you’d generally pay, just over a longer period of time.

It’s no secret that these BNPL schemes make us far more likely to hit the “Buy Now” button, without considering the long term consequences. 

And because programs like Klarna, Afterpay, and Sizzle make spending so tempting, it’s easy to fall into a pattern of spending that feels like addiction, especially when making large purchases that you’d ordinarily balk at.  

Use at your own risk.

You’ll feel more comfortable buying things you don’t need

Photo credit: Megan Bucknall

No, no – take the Dunder Mifflin coffee mug out of your Etsy shopping cart. Remove those neon polka dot rainboots from the bag. And just because you saw Lily Collins rock a giant Teddy fur coat in the latest Emily in Paris episode doesn’t mean you automatically need to buy the exact same one.  

I only say this as someone who *knows* how tempting it is to make dumb purchases just because you have those BNPL schemes to soothe your buyer’s remorse. Some of my most frivolous purchases (okay, all of them,) have been made with Klarna’s help. 

Believe me. I once bought $600 worth of fancy over-the-top party dresses that I’ve worn a total of… well, a total of zero times since I bought them. (And that was over a year ago now. Each time I open my closet to see those dresses collecting dust, I still feel such a sense of shame I want to weep. Thanks a lot, Klarna.)  

Instant Gratification 

Photo Credit: Jon Ly (Unsplash)

It’s not exactly a secret that we live in the age of “instant gratification.” While it may feel like a huge, amazing endorphin rush to get all these goodies shipped to us with such “low payments” spread out over time, it’s extremely harmful and problematic to our psyches in the long run. 

In today's world of instant gratification, we often forget what really matters and end up living empty lives filled with quick fixes. Technology keeps us hooked on fleeting pleasures, giving us a false sense of satisfaction. But true happiness and real relationships take time and effort. We feel more fulfilled when we work hard for what we want instead of falling for those Buy Now, Pay Later schemes that promise instant rewards but leave us wanting more.

It’s easy to lose track of how many purchases you’ve made over time that have been paid for via BNPL. It seems harmless in the short term, but over time, these out of control spending habits can easily add up. This can lead to debt if you’re not keeping track of your finances. 

BNPL schemes can negatively impact your credit score 

Photo Credit: George Bakos (Unsplash)

If you’re not careful with your payments, Buy Now, Pay Later programs can negatively impact your credit score. To avoid this, make sure you’re getting all your payments in on time for every installment. And if you miss payments, this can result in late fees and quickly snowball. No thanks!

Murder on your wallet in the long run

Often, Klarna, Afterpay, and Sizzle will make you feel a whole lot more comfortable spending hundreds, if not thousands of dollars on whatever it is that your heart desires. Yet at the end of the day, even if it’s done in installments, you’re still spending the same amount of money, but with interest and possible late fees. This is a surefire way to empty your wallet in no time. 

Late fees are high for Buy Now Pay Later Programs

It’s best not to miss a payment for these Buy Now Pay Later programs, unless you’re willing to pay a hefty price. Late fees can run up to 25% of your purchase, so consider if you’re in a financial position to risk this. 

Lack of financial discipline 

Photo Credit: Tristan Colangelo (Unsplash)

At the end of the day, having financial discipline is crucial. While I see no issue with spending big every once in a blue moon because it brings you joy, it's wise to save those moments for special occasions, unless you're financially comfortable enough to splurge.

Even if money isn't a concern, practicing good spending habits is still valuable. It helps you secure your finances, steer clear of instant gratification traps, and ultimately enhances your well-being.

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