How Much Will Buy Now, Pay Later Cost?

Free service often comes with big late fees

Andy Spears
2 min readApr 18, 2022


Photo by David Dvořáček on Unsplash

While Buy Now, Pay Later services — like AfterPay and Klarna — may seem convenient, they can wind up being pretty costly.

In fact, Fintech Business Weekly notes that AfterPay is making some pretty big money on late fees. According to the company’s reporting, in the second half of 2021:

Late fees increase 124% YoY, accounting for 12% of revenue vs. 8% in the comparable prior period


This is probably why consumer groups have been warning people to proceed with caution when it comes to Buy Now, Pay Later:

Groups like Consumer Federation of America (CFA) and National Consumer Law Center (NCLC) have said the products are largely unregulated and present potential harms to consumers:

“BNPL products have largely evaded oversight by federal and state regulators,” the groups stated. “Although these products could have a place in meeting consumer needs if they operate as promised, they pose a risk to consumers and should be covered by basic consumer protections.”

U.S. PIRG also noted:

Our findings, based on a review of complaints to the Consumer Financial Protection Bureau (CFPB) and the Better Business Bureau (BBB), show that hidden fees, interest and debt collection problems can harm consumers. We also find that consumers also face problems with customer service.

Additionally, a recent survey showed that more than 20% of consumers who use BNPL later regret the decision:

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Andy Spears

Writer and policy advocate living in Nashville, TN —Public Policy Ph.D. — writes on education policy, consumer affairs, and more . . .