Definition
Point-of-sale installment plans that split a purchase into a few payments, commonly four interest-free installments over about six weeks, with longer interest-bearing plans for larger purchases. Late payments can trigger fees, and plans increasingly appear on credit reports.
Why it matters
BNPL moves the pain of a purchase into the future, which is exactly why it drives overspending. Several small plans stack into one large claim on the next few paychecks.
Example
A $240 purchase becomes four $60 payments. Painless, so two more plans follow, and suddenly $180 of installments is due across the next six weeks, competing with rent. Each item was affordable individually; the stack was not.
Related terms
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