Buy now, pay later: How many small payments add up?
Buy now, pay later (BNPL) services let people buy right away and pay in installments. A common option is “pay in four,”where the customer makes one payment at checkout and three more payments, usually every two weeks. Some providers also offer longer payment plans that may charge interest.
BNPL is becoming a larger part of consumer credit. The Federal Reserve estimated that providers originated close to $160 billion in BNPL credit products in 2025, with pay-in-four plans making up about half of that amount. In its 2025 survey, the Federal Reserve also found that 16% of adults had used BNPL in the past year.
The payment schedule can affect how much money is available later. A person may have several BNPL payments due around the same time as rent, bills, or other purchases. In the Federal Reserve’s survey, 26% of BNPL users said they had paid late. Of those users, 64% were charged extra for being late, and 11% had a payment trigger an overdraft or non-sufficient funds fee from their bank.
The cost and credit effects depend on the plan and provider. Many pay-in-four plans don't charge interest, but late fees may apply, and longer plans may charge interest. A missed payment could lead to late fees, a frozen account, or the debt being sent to a collection agency. BNPL providers do not all report payments the same way, but unpaid debt sent to a collector may be reported and affect a person’s credit.
Sources:
Comments