Will Buy Now, Pay Later Leave Coal in Holiday Stockings?

Sure, it’s convenient — but it can also be costly

Andy Spears
3 min readNov 30, 2022


Photo by Nathan Dumlao on Unsplash

It was not long ago that the holiday shopping season meant putting items on layaway.

You’d find that perfect gift, pay a percentage of the cost to the store so they would hold it for you, and pay in full before gift giving time in order to retrieve your gift.

You don’t have the money today, but you know your kid needs this bike? Put some cash down now, save up, and be a hero in late December!

Now, though, there’s something even better.

Buy Now, Pay Later means you can pay 25% of the cost of an item and leave with it today.

No worries — you HAVE the item when you leave the store or check out online.

The balance of the transaction is paid over 3 additional installments, usually two weeks apart. It’s auto-deducted from your account or card on file, so you don’t even have to think about it!

Sounds easy — and even better than layaway! You get the item NOW!

Not so fast, consumer advocates say.

In a recent article posted on LinkedIn, advocates with the Center for Responsible Lending highlight some concerns with Buy Now, Pay Later products:

Marketed as interest-free, consumers may end up being charged more than they think they will. If a consumer has multiple buy now, pay later purchases, they can easily lose track of their payments, which could result in numerous fees for missed payments, account reactivation, rescheduling and other hidden fees they weren’t aware of at the outset.

BNPL lenders often don’t assess a borrower’s ability to repay the loans, and accounts can be debited even if the borrower has insufficient funds, which could trigger an overdraft fee. Further, surprise fees and inadequate disclosures make it difficult to compare costs and make the true cost of a BNPL loan difficult to ascertain.



Andy Spears

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