The New York Department of State’s Division of Consumer Protection is offering tips for using Buy Now, Pay Later (BNPL) services safely during the holiday season. BNPL has grown in popularity as a way to make purchases in installments instead of paying the full amount upfront. Consumers are increasingly using BNPL for items ranging from electronics and furniture to groceries and meals, but some are falling behind on payments.
Secretary of State Walter T. Mosley warned that BNPL, while convenient, can lead to growing debt if not used responsibly. “The Division of Consumer Protection has important information and tips for those using this payment method to avoid falling into financial traps,” he said.
BNPL carries several risks. Research indicates it can encourage overspending and impulsive purchases, and younger consumers have the highest usage rates. While short-term plans are often interest-free if paid on time, long-term installments can carry high interest rates, sometimes between 10 and 30 percent. Many users also take out multiple BNPL loans at once, which can add up to a significant monthly financial burden. Missed payments may trigger late fees, penalty interest rates, or reports to credit bureaus, potentially affecting credit scores.
To use BNPL responsibly, the Division recommends reviewing payment terms carefully, tracking all loans, planning payments in advance, and automating payments when possible. Consumers should also practice intentional spending and understand how BNPL could impact their credit. By keeping track of payments and staying within a budget, users can take advantage of BNPL’s convenience without falling into debt.
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