“Buy Now, Pay Later” apps are everywhere—Flipkart Pay Later, Klarna, Afterpay, Amazon Pay Later. They allow you to buy items instantly and pay in installments. But is it a good idea?
Pros of BNPL
- Convenience: Instant approval at checkout.
- Interest-Free (Sometimes): Many apps offer zero-cost EMIs if repaid on time.
- Budget Management: Helps spread big purchases into smaller chunks.
- Credit Building: Timely payments may improve your credit score.
Cons of BNPL
- Hidden Fees: Late payment penalties can be steep.
- Encourages Overspending: Easy approvals tempt people to buy more than they can afford.
- Impact on Credit Score: Missed payments hurt your credit history.
- Debt Cycle Risk: Multiple BNPL accounts create confusion and financial strain.
When BNPL Works Well
- Buying essentials you can repay in a month or two.
- Using zero-cost EMI for big-ticket items (laptops, appliances).
When to Avoid
- Using BNPL for impulse shopping or luxury items.
- When you’re already struggling with debt.
Conclusion:
BNPL is a useful tool if managed wisely, but it can quickly turn into a debt trap. Treat it like a credit card—only spend what you can repay comfortably.