Spend Well: Borrowing Basics, Personal Spending

With the use of Smart Phones, it is really easy to spend money in just a couple of clicks. Social media caters its ads to just what we want, and online stores offer a variety of Buy Now, Pay Later (BNPL) options. Even better, they usually offer no credit checks! 

But how do these BNPL options REALLY work? Are they helping you or actually hurting you?

Put simply, they weren’t made to help you. These apps want you to spend money so they gain money from you through the interest. And they make it really easy to do so, encouraging your impulsive purchases. These

impulsive purchases are items that you don’t actually need, and they increase any existing debt you might have.

Klarna and Afterpay might be familiar to you, they are two of the top BNPL companies used.

You might initially not have any issues with making a payment, but what about when unexpected expenses occur? When you end up delaying the BNPL payments, you will end up owing MORE money. Late fees and interest rates happen, even with what seem like simple purchases such as clothing or “basic” electronics. 

Not being able to pay on time also affects your future credit score, causing struggles when later wanting to obtain a mortgage or vehicle financing. 

The best rule to follow, if you don’t have the cash for it, and you don’t actually need it, resist, and save yourself the headache of a ruined credit score. 

List out your wants and needs clearly to really examine what are potential necessary purchases. It can be helpful to make a list of things you want, but don’t have the current funds for, and to revisit that list in about a year. That may seem like a long time, but most of the time you’ll find that the item doesn’t even interest you anymore. Taking the time to do this can save you from lots of unnecessary spending!

Below is a simple chart showing the pros and cons of Buy Now, Pay Later. There are more things to be considered than what is listed, but this is a basic start to hold yourself accountable.

BNPL Pros and Cons


  • Zero-interest plans available.
  • No minimum credit score required.
  • Available at most major retailers for checkout.


  • Some plans my charge interest.
  • Some plans may charge fees.
  • Easy to overspend.
  • Disputes and returns can be challenging.
  • Payments may not be reported to the three main credit bureaus.

Sources: Hawrylack, S. (2023). Buy now, pay later, no credit check (BNPL): Good idea? Buy Now, Pay Later, No Credit Check (BNPL): Good Idea?

Page last updated 7:33 AM, June 11, 2024