With online spending becoming the norm for a substantial portion of the U.S. population, buy now, pay later (BNPL) services are soaring in popularity — a March study from Adobe indicates that BNPL revenue has skyrocketed since the beginning of the COVID-19 pandemic.

                By                    David Nadelle

BNPL companies have more recently started to offer the same convenience and zero-interest installment payments through credit cards concerning in-store purchases. What does this mean for American consumers?

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The BNPL option has quickly been adopted by traditional banks and major credit card companies to compete with existing fintech offerings. American Express (Pay It Plan It), Chase (My Chase Plan) and Citibank (Flex Pay) all offer BNPL point of sale card options.

Pros and Cons of Buying With BNPL

Adding a BNPL plan to your existing credit card may help you pay off your purchases in installments without having another large up-front bill to worry about. BNPL plans may limit your tendency to overspend (although some say there is an added tendency to overspend, due to the fulfillment that comes with instant purchasing) and the promise of interest-free payments with low risk to your credit score is enticing, too. 

Popular or not, an increase in BNPL options like credit card linking won’t quell common warnings with using “credit.”  BNPL purchases require direct payment deductions from either credit or debit cards. Because each BNPL purchase comes with its own set of payment due dates — unlike the fixed payment date for a credit card bill — these ongoing deductions can easily lead to consumers incurring additional bank fees assessed for insufficient funds and overdrafts.

If you cannot afford payments, BNPL plans carry interest, penalties and credit score impacts just like credit cards — so it is crucial to research the financing terms with these options. Additionally, many BNPL transactions do not automatically come with product return or fraud protections that most credit cards offer.

BNPL Plans are Here to Stay

Regardless of the various pros and cons, BNPL options are here to stay and will continue to evolve as consumers look for more spending options (and ways to customize their credit outlets).

See: POLL: What Do You Think of Elon Musk Buying Twitter? Find: Attitudes Toward BNPL Differ by Generation, but Use Is Similar

BNPL cards are just the first step to personalized hybrid credit solutions according to Ahon Sarkar, general manager at banking as a service (BaaS) provider Helix. “You will start to see the way that we interact with credit as a society change a little bit,” he said of BNPL’s emerging popularity, per Time. “I think you’ll see these different credit instruments become more interchangeable… Over time, you’ll start to see these things get personalized to each user.”