Buy Now, Pay Later: Risks and Precautions You Need to Know
- Antonio Carlos Faustino
- Aug 6
- 9 min read
Buy now, pay later. For many, it sounds like music. After all, who hasn't wanted to pay for that dream purchase in installments without feeling the pinch of a credit card bill? But, as we finally know, not everything that seems easy is actually simple. "Buy Now, Pay Later" (BNPL) models have been growing rapidly in the Americas and transforming the way modern society consumes. In Good Morning, America!, the goal is to take a closer look at trends that are changing our daily lives. And here, we need to go beyond promises.
The advance of BNPL in the Americas
To understand why we're talking so much about this topic, it's worth taking a look at the numbers. The Richmond Federal Reserve reported that, between 2019 and 2021, the number of BNPL transactions in the US jumped from 16.8 million to 180 million. In terms of value, this represented a jump from $2 billion to $24.2 billion. The apparel and beauty sectors lead the way, but the service is already present in a variety of segments – from electronics to digital services.
By 2023, two-thirds of US consumers had received offers of this type of payment . Between 14% and 25% had used it at least once. If we look at the entire adult population, millions of people consider this option in their daily lives. And, of course, it's no different in other countries in the Americas, including Brazil.
Why are we resorting to 'buy now, pay later'?
At its core, BNPL's purpose is simple: to provide greater access to consumption. It allows you to purchase products even without sufficient funds at the time. And this detail catches many people's attention. Stanford professor Ed DeHaan revealed in his research that, in 2021 alone, each average user in the US paid around $500 per quarter, in approximately twelve different installments, using BNPL.
This is a practical solution to a lack of liquidity. A refrigerator breaks down and there's no reserve? BNPL. A pair of urgently needed sneakers for your child's school? BNPL. It seems like the perfect solution, but this approach deserves consideration—especially for those already facing tight budgets.
How buy now, pay later works in practice
When you make a purchase with BNPL, you're essentially taking out a small loan. The store receives the full amount, while you pay in installments, usually interest-free, as long as you meet the deadline. These are fixed installments, usually biweekly or monthly, and the details vary.
Simplicity: Generally, you just need to choose BNPL in an online or physical store, enter some information, and that's it: purchase approved in seconds.
Installments: The amount is divided into 3, 4, or even more installments, with rare credit analysis requirements.
Interest-free (in theory): As long as it is paid on time, many promise not to charge extra fees.
Some providers even let you choose your payment dates, adjusting them to your salary or receipt schedule. This makes it all... too tempting, perhaps.
Who are the main suppliers and how do they operate?
The BNPL market is led by large financial technology companies operating globally. In Brazil, several fintechs already offer options during checkout for large retailers and small businesses. Outside Brazil, global giants dominate. These providers typically:
They partner with stores and marketplaces to integrate the service directly into the website.
They perform less rigorous risk analysis than traditional banks, facilitating access.
Enticements like “instant approval” and “interest-free” are commonplace.
They offer applications for payment control and due date notifications.
The model appeals to both merchants, who sell more, and consumers, who see flexibility. However, clear information about the consequences of failing to meet deadlines is often lacking.
Why does BNPL seduce (and worry) so many people?
Psychologically, buying without immediately feeling the financial impact tends to ease the burden of the decision. Psychologist Mark Travers explains that BNPL tricks our brains, as the emotional impact of the purchase is lessened—we spend and only later think about the installments.
“It’s easy to lose control when you don’t feel the expense firsthand at the time.”
This situation paves the way for quick and sometimes regrettable decisions. The format seems "harm-free," but risk lurks. And it's not just an impression: the numbers prove it.
Apparent advantages of buy now, pay later
Of course, there are reasons for success:
Access to consumption: Ideal for emergencies or immediate needs without available funds.
Speedy purchasing process: Often simpler than a conventional card or loan.
Flexible installment plans: More control over family cash flow, at least in theory.
Possibility of avoiding high interest rates: If the consumer pays on time, they don't pay interest – unlike with credit cards in general.
For many, especially those who cannot or do not want to use credit cards, this can be the gateway to access goods and services that were previously unattainable.
The hidden risks of BNPL
The problem begins when the promise of ease meets the reality of your pocketbook. According to a Bankrate survey , 49% of US adults who used BNPL faced at least one problem. The most common:
Expenditure beyond what was planned (24%)
Late payments (16%)
Regret (15%)
The survey also highlights that Generation Z is the most vulnerable, with 66% reporting at least one challenge in this type of service. And those already experiencing financial problems are even more impacted, as shown by the Federal Reserve Bank of Kansas City .
Invisible fees and debts
BNPL is often presented as fee- and interest-free. However, in practice, one delay is enough for charges to begin—often higher than those for conventional cards. Research led by Stanford professor Ed DeHaan revealed that BNPL users pay, on average:
4% plus overdraft fees
2.3% more in credit card late fees
1.1% more in card interest
It may seem small, but in volume, these percentages create a constant hole in the budget. And, since many users are financially vulnerable, these fees hurt those who can least afford them even more.
The temptation to consume beyond the limit
With reduced barriers and the promise of low installments, there's an involuntary incentive to buy more, even when you don't need it. Psychologist Mark Travers's study suggests that our brains "feel less" about spending, which encourages impulsive buying.
It's as if the payments pile up invisibly. In the end, dozens of small installments add up and weigh more than we imagined.
Real Stories: Negative Experiences with BNPL
To “humanize” these warnings a bit, here are some stories we heard from Good Morning, America! readers who wanted to share their stories.
Example 1: The case of the installment refrigerator
Luciana works as a cashier at a pharmacy in the interior of Minas Gerais. When her refrigerator broke, she opted for BNPL to avoid having to refrigerate food. The first three installments were paid without issue. However, a delay in her salary caused her to miss the deadline for the fourth installment.
"The fine came to over R$80. After that, it snowballed..."
She had to rely on her family to pay off the accumulated debt and get her finances back on track. Luciana says that if she had known the size of the fine beforehand, she would have made a different choice.
Example 2: Shopping for the child, loss in the account
Eduardo, a civil servant, thought he was getting a good deal by splitting his son's school supplies into four installments. He was seduced by the instant approval. With other bills also being paid in installments, he quickly lost track of due dates.
In the second month, he missed a payment. He received a notification of a negative credit rating and even received discounts on his future bank credit limit. The result: regret and a lesson in the importance of calculating before purchasing.
Ana, a college student, paid for small online purchases in installments using BNPL. She wanted to make her life easier and avoid using a credit card. In six months, she accumulated more than 10 simultaneous payments. The individual amounts were small, but together they exceeded her intern's salary. She had to take out a loan to pay it all off.
“The sum of the installments seemed like nothing. Suddenly, I realized I was committed for months.”
Stories like these illustrate the warning we bring in Good Morning, America!: small conveniences can become big headaches if you don't pay attention.
How to avoid pitfalls: practical tips for using BNPL
Is it possible to take advantage of the convenience of BNPL without falling into debt? It's possible, as long as you plan and exercise caution. Here are some key considerations:
Read the entire contract: We know it's a pain, but late fees are usually in the fine print. Find out how much a slip-up costs.
Plan for the long term: Add up all your existing payments before requesting a new purchase. Make sure they fit within your monthly budget.
Use BNPL only for what's necessary: Set aside funds for emergencies and essential items. Don't make installment payments a recurring habit.
Activate alerts and reminders: Set due date reminders in your calendar or apps to avoid the risk of forgetting a payment.
Be careful with multiple purchases: The risk increases when you have multiple installment plans active at the same time. A small installment, when added to others, becomes a large debt.
Calculate the impact: Do the math, write it down on paper or digitally. Seeing the total amount can be daunting—and can prevent slip-ups.
calculadora sendo usada para cálculo de parcelas When is it not worth using BNPL?
The system is designed to help in specific situations, but it doesn't always make sense. BNPL may not be the ideal choice when:
You already commit a good part of your salary to other fixed bills;
There is no exact forecast of when there will be money to pay off all the installments;
You keep forgetting payment dates and don't trust your own control;
You are using the model on impulse, not out of real need.
The temptation exists, marketing is strong, and society seems to want all consumption to be immediate. Therefore, a little critical distancing is essential.
The current and future landscape of buy now, pay later
As consumers seek greater flexibility, BNPL is rapidly gaining popularity across the Americas. Good Morning, America! is closely following the changes: banks, fintechs, retailers, and regulatory bodies are debating limits, transparency, and fairer rules for services. Proposals for greater regulation to protect consumers are already being discussed.
In this scenario, financial education becomes a key differentiator. Those who understand the risks and plan accordingly make safer, smarter choices. BNPL can be a solution, but for those who don't master their own financial routine, it can also become a silent abyss.
“Today’s ease may be tomorrow’s debt.”
Therefore, Good Morning, America! invites you to stay with us, stay up-to-date on consumer trends, and strengthen your financial independence. BNPL may be just a passing fad, but the choices you make today can impact your life for years to come.
Conclusion: choose well, always be informed
Buy Now, Pay Later is here to stay. It can be useful in specific situations, as long as it's used responsibly and with careful attention to detail.
Before accepting that irresistible offer in just a few clicks, read the contract, review your budget, and plan ahead. Talk to people, do your research, and share your experiences here at Bom Dia, América !.
If you'd like to delve deeper into issues that affect our daily lives and receive exclusive tips on conscious consumption, financial literacy, and other relevant topics from the Americas, sign up for our newsletter. Let's grow together, always with quality information.
Buy Now, Pay Later (BNPL) FAQs
What is Buy Now, Pay Later?
Buy Now, Pay Later (BNPL) is a model that allows consumers to purchase immediately and pay in installments, usually interest-free, as long as payments are made within the established deadline. It's an alternative to traditional credit cards or direct loans.
How does Buy Now, Pay Later work?
BNPL works in partnership with stores and fintechs. Customers choose this option during checkout, provide some information, choose the number of installments, and, if approved, receive the product immediately. Payments are made on future, usually fixed, dates, and the total amount can be divided into three, four, or more installments.
What are the risks of Buy Now, Pay Later?
The main risks are accumulating debt from multiple purchases, charging fees and fines for late payments, and the ease of falling into debt without realizing it. Many consumers underestimate the impact of these small installments, which can compromise their monthly budget and make future repayment difficult.
Is it worth using Buy Now, Pay Later?
It depends on your financial control. BNPL can be beneficial in emergencies or when used for real needs, as long as you plan ahead. It's not recommended for impulse purchases or when you lose track of payment dates and amounts. Caution and information are essential to avoid problems.
How to avoid debt with Buy Now, Pay Later?
Carefully read all terms of service, plan your budget considering all active installments, use the modality only for essential needs, activate due date alerts, and avoid accumulating multiple installment payments at once. If you feel like you're losing control, try to reorganize your finances before taking on new debt.
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