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With the increasing trend of online shopping, the facility of BNPL (Buy Now, Pay Later) i.e. ‘Buy Now, Pay Later’ is also becoming increasingly popular. The easy process and the initial interest-free facility attracts many people. However, financial experts say that if it is not used wisely, it can trap you in debt.

How does debt increase?

Through BNPL, people buy goods without making immediate payment. Since money does not come out of the pocket at that time, the expenditure is less realised. This is the reason why many people buy more than necessary.

Many consumers use BNPL simultaneously on different platforms. Later it becomes difficult to remember different payment dates. If payments aren’t made on time, late fees and other additional charges start to add up, turning even small purchases into huge debts.

Credit score is also affected

According to experts, not paying BNPL on time can also affect your credit score. Bad credit history can cause problems while taking loan or credit card in future.

Keep these things in mind while using BNPL

• Use BNPL only for essential purchases.
• Avoid taking BNPL on multiple platforms simultaneously.
• Note the due date of every payment and pay the bill in full on time.
• Read the late fee, processing charge and other terms carefully before accepting the offer.
• Spend as per your monthly income and budget.

BNPL can be a convenient payment option, but continued use without a financial plan can have a negative impact on both your budget and credit profile. Therefore, it is important to understand all the terms and potential costs of any ‘buy now, pay later’ offer before accepting it.