It’s hard to miss the buy now, pay later options becoming more common on the checkout pages of online stores, both large retailers like Amazon and Walmart, and small local businesses.

Buy now, pay later is exactly what it sounds like.

Similar to layaway programs, buy now, pay later sites allow customers to purchase items they might not have the cash to pay for straight out of pocket, and take them home the same day.

For Jean Keene, a single parent in Derry, websites like Affirm and Afterpay are helpful, as her 15-year-old son has been playing high school basketball for the last couple of years.

“The most expensive part of that is shoes,” said Keene, 50, adding they can cost around $180 per pair. “Whenever I first had to buy those shoes, it’s a lot out of the pocket at one time.”

Afterpay ended up being the “perfect” option for her — allowing her to split the shoes into four payments but still take the shoes home that day. She was also able to buy her son’s class ring on the platform.

Ashley Hardwick, who works in the banking industry, has seen firsthand how buy now, pay later options can be both beneficial and harmful for families.

“They can definitely make the option for a bigger purchase feel more manageable, but it ultimately depends on discipline,” said Hardwick, 32, of New Kensington. “It can turn into another monthly bill without realizing.”

Keene receives text messages about upcoming payments so she doesn’t miss any. It’s easy for people to miscalculate how much they’re spending on buy now, pay later sites, she said.

“Before you know it, you have more than you realized being taken out of your bank account,” she said. “I’ve not overdrawn … but I have had a couple of situations in the past where you know two of them had come out at the same time — it just kind of made things a little bit tight for the next couple of weeks.”

Opting to buy now, pay later

An estimated half of Americans have used “buy now, pay later” at least once, the New York Times Magazine reported, with half of users being early-career individuals under age 33. The total value of purchases rose to $120 billion in 2023 in the United States alone, up from just $2 billion in 2019, the Times said.

The most popular BNPL sites are Affirm, Afterpay, Klarna, Sezzle and Zip.

Lyzona Marshall, director of the Wukich Center for Entrepreneurial Opportunities and assistant professor of business at Seton Hill University, has mixed feelings about them. But from the business perspective, she said, they’re a “great tool.”

“I see more of a trend, individuals don’t want to have to wait for anything; you can get pretty much everything overnight,” she said. “I think we’re just catching up to what we see at the national level. More and more, people are trying to be current with what they want. It’s difficult to see when individuals probably can’t afford the things they get.”

And through buy now, pay later, that can be anything — clothing, home goods, food items and more.

For small businesses, buy now, pay later could be a way to boost sales and avoid what she called “shopping cart abandonment” — when people online shop and put things in the cart, but then don’t check out.

Marshall said she would be concerned about the ethical and moral implications of using the platforms, which seem like “free loans” on the outside.

“On the surface, it definitely gives a great opportunity to help close those sales,” she said. “That’s what makes it so tempting. … It’s very convenient.”

Though the sites advertise “interest-free” financing, the interest rate on longer-term plans can go as high as 36%, the Times reported. And with failed payments, late fees can also pile up.

Getting approved typically requires no minimum credit score. Instead, applicants need a cellphone number, proof that they are 18 or over and a payment method.

Previously, buy now, pay later payments didn’t affect a person’s credit score. But credit scoring company FICO recently announced it will add data from buy now, pay later loans to some of its scores.

The online retail giant Amazon partners with Affirm and other buy now, pay later options. One web page explains to Amazon users what Affirm is and how they can use it for their orders.

Walmart officially ended its popular layaway program before the 2021 holiday season in favor of buy now, pay later financing options like Affirm. Now, there’s an explanatory page on Walmart’s website displaying these financing options.

Some of the remaining popular retailers that still offer layaway programs include certain Hallmark locations, Gabe’s and most Burlington locations.

Mary Jo Matthews said she was surprised by how many people are actually using buy now, pay later sites so frequently.

“I use them a lot,” said Matthews, 65, of Greensburg, who believes they’re better than credit cards. “If I don’t have the money for something right then and there, I will use them.”

She previously liked using layaway options at stores around the holidays and said she believes buy now, pay later is a good way to get something she really wants that’s too expensive to purchase outright.

“I just think it makes my money last a little bit longer. … I like to shop a lot, so it helps,” Matthews said. “Because of how things are getting to be more expensive, I think it will definitely be something that people look into.”

Matthews said when she uses the sites, she likes to pay them off ahead of the deadlines.

“They’re paid off right now, but sometimes, I have a lot on there,” she said. “In a pinch, it’s a nice little thing to have. I just think, in my personal opinion, it’s a good idea, and I recommend it.”

Using responsibly

Eric Newill has never missed a payment Afterpay, on his buy now, pay later platform of choice.

“For me, as a single dad with two boys — 15 and 12 — who want everything under the sun … it’s really nice,” said Newill, 49, of Latrobe. “I line it up for when I know I’m getting paid. They add a little interest charge, but it’s not much.”

His boys are very into sports, wanting various baseball, football and hockey jerseys. Since Afterpay is partnered with Dick’s Sporting Goods, he said he can buy both of them jerseys and pay the bill over four installments every two weeks.

“I just recently moved into a new townhouse; I bought a brand-new fireplace to go under the big screen,” Newill said. “Rather than drop the lump sum up front as a single dad, it’s very, very helpful.”

For almost three years, he’s been using buy now, pay later, and he also got his brother — another single dad — to start using Afterpay, too. When people first apply, they’re given a spending limit based on their credit.

“I think I can spend up to five grand, which I never do, but it’s nice,” Newill said. “My Jeep’s getting inspected, and I bought tires from Walmart.com … so I pay for one tire every two weeks.”

The specific buy now, pay later sites like Afterpay won’t let people spend over their max allowed spending limit, but that can lead people to open multiple buy now, pay later accounts or turn to other credit options. It’s all about personal control, Newill said.

“If you’re an adult and you’re smart about it, you don’t want to ruin a good thing,” he said. “I’m sure people have abused it.”

For Sarah Veraldi, who chooses not to keep credit cards with her, buy now, pay later options are crucial in last-minute or emergency situations.

“If I have a credit card, I know that I can just blow it and then … people rack it up because then they forget,” said Veraldi, 48, of New Alexandria. “I know I have a job that I’m paid weekly for, so I know that it’s going to be paid off in two weeks versus like a year. … My turnarounds when I use these are very quick.”

She’s mainly used Affirm and Klarna for large purchases like out-of-state travel, Airbnb reservations and tires for her SUV.

“I believe honestly, if you use it correctly and not to fund your life and pay on time … it can be a good thing,” Veraldi said. “If you have a problem already walking into something and don’t have good habits, it can lead to disastrous results.”

Especially with the holidays coming up, she said, “buy now, pay later” options are at the forefront for families, as they’re available at most major stores.

“It’s such a bigger height to live up to with little kids — it’s a whole different kind of thing now,” Veraldi said of holiday shopping. “I can imagine the parents’ stress of trying to provide. … If you do it smart, it can totally work in your favor if you have self-control.”

Perpetuating overspending

Before her work in the fraud side of banking, Hardwick was a financial solutions specialist for First National Bank, helping people manage monthly budgets and build credit scores.

“A lot of the things I would see from the banking world kind of come down to psychological, tendency to spend, self-discipline and control,” she said. “The intention behind a large purchase — is it necessary? Is it a want?”

With buy now, pay later programs, Hardwick said, oftentimes people can overspend, causing them to go into debt.

“I think the programs probably target more during the holidays because of the pressure surrounding the holidays,” she said.

She’s seen some families still paying off the gifts from the previous Christmas as the holidays approach again, as well as people having buy now, pay later payments coming out of their accounts every day.

“I think they can definitely be beneficial, but it also blurs the lines in the sense of real money,” Hardwick said. “Managing those small payments, it can be a lot; they all have different due dates.”

Since the money isn’t automatically coming out of people’s bank accounts or they may forget about a payment coming out, they may think they have more money than they actually do, according to Hardwick.

“You’re not keeping track of how much you’re actually spending,” she said. “It can definitely create more stress and more pressure.”

Personally, Hardwick has purchased her daughter’s iPad and a couch through Wayfair using buy now, pay later options. The iPad was $30 a month, which she said “made sense” for her budget at the time, with the total interest of $22.

Moving forward, she said, she would only use buy now, pay later for an unexpected expense like an emergency or car troubles.

Nova Fox has also been a banker for more than five years at various Western Pennsylvania banks. She compared buy now, pay later options to online gambling.

“It’s the same convenience that’s available to people now, and they just keep hitting the button and don’t stop,” said Fox, 26, of Bellevue. “It’s creating this insane debt cycle. It’s easy, it’s convenient, but it’s really damning.”

For example, she said she’s seen people get charged with “dozens” of Klarna payments the same day they get their paycheck and have to turn to payday loans just to make ends meet.

A payday loan is a short-term, high-cost loan, usually $500 or less, that’s due on a person’s next payday, according to the Consumer Financial Protection Bureau.

“They start turning to payday loans, and then they lose track and then they can’t pay anything off anymore,” Fox said. “Lots of people can’t keep up … and then they lose track of what’s coming out; they don’t remember what it’s deducting funds for.”

Olivia Karazsia doesn’t let customers at her Monroeville salon use the buy now, pay later option, as she said it would charge her a 6% fee on every transaction.

Karazsia, 29, of Buffington Township, owns Bella Vida Salon on Mall Boulevard, which uses the platform GlossGenius to book hair appointments. She doesn’t allow her customers to use Affirm through GlossGenius.

Hair appointments average around $100, she said, but for bigger services like hair extensions, the average can be around $1,300 for an initial appointment, and then $65 to $300 for maintenance appointments.

And a 6% fee for a $1,300 appointment can be “significant,” Karazsia said.

“After products, supplies, rent, taxes and then to add the 6% on top of what I have to pay out, would leave me with little profit,” she said.

Even though Karazsia doesn’t allow her customers to use buy now, pay later, the majority of customers still pay with a credit card, she said.

“I think loans are a good thing, but also they’re very tricky — you have to know that you can pay them back,” she said. “I have seen clients go into debt and even had a client take a personal loan out to get her hair done.”

Veraldi believes buy now, pay later options are here to stay.

“Right now, with the economy and everything and with the way that it is, there are a lot of people middle class and under — let’s be honest, they just don’t have it,” she said. “As long as people are in the position that they are now financially, they will always be around because there’s always going to be somebody that just doesn’t have the same financial needs as the next person.”

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