Lizzy and Lissa break down the hidden costs – financial and otherwise – of "buy now, pay later". They unpack how these offers can seem harmless or even helpful in the moment, but often lead to overspending, budgeting confusion, and a cycle of debt that’s harder to spot than with traditional credit cards. Plus, they explore the emotional toll of feeling behind on payments and why it’s so easy to underestimate the long-term impact.
Lizzy and Lissa break down the hidden costs – financial and otherwise – of "buy now, pay later". They unpack how these offers can seem harmless or even helpful in the moment, but often lead to overspending, budgeting confusion, and a cycle of debt that’s harder to spot than with traditional credit cards. Plus, they explore the emotional toll of feeling behind on payments and why it’s so easy to underestimate the long-term impact.
Main Topics
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References for Statistics
https://capitaloneshopping.com/research/buy-now-pay-later-statistics/
ttps://www.lendingtree.com/personal/bnpl-late-survey/
Lizzy: One in five consumers use buy now, pay later in 2023 according to Capital One Shopping.
Lissa: LendingTree says that 1/3 of those buy now, pay later users made a late payment in the past year. Today, we are discussing, is buy now, pay later worth it?
Lizzy: Let's talk about it.
Lissa: Welcome to Net Net with Lizzy and Lissa, where we analyze hidden costs and empower you to make your own damn decisions in life. Each episode covers a different facet of life, and at the end of each episode, we each give our takes on whether we think something is net positive or net negative.
Lizzy: I'm Lizzy, a strategist and consultant with almost 20 years of experience in finance and investing.
Lissa: And I'm Lissa, a personal finance expert and a certified financial planner. We're best friends who talk about money-
Lizzy: And everything else.
Lissa: In today's episode, we are discussing buy now, pay later, sometimes referred to as BNPL, which is a short-term financing method that is sometimes made available to consumers for smaller purchases. However, this episode is informational and educational in nature and should not be misconstrued as financial advice. We share our experiences and our thoughts to help educate, but you should always consult a professional for guidance as needed. Is buy now, pay later worth it?
Lizzy: First up, running the numbers on buy now, pay later.
Lissa: Earlier, we said that one in five or 20% of consumers used buy now, pay later in 2023. LendingTree says that more than 40% of Americans have used it at some point in their life.
Lizzy: Wow, okay.
Lissa: Yeah.
Lizzy: They report that buy now, pay later is most popular with Gen Z-ers at 58%, parents with young children, 57%, millennials, 55%, and men in general-
Lissa: Wow.
Lizzy: ... at 50%.
Lissa: Interestingly, and not surprisingly, regret is common for BNPL users. 43% have regretted financing a purchase with buy now, pay later, and a third of those with regret leveraged buy now, pay later for a purchase of $500 or more. So just taking them longer to pay it off.
Lizzy: Yep.
Lissa: Oh. That makes sense when you consider that 54% of buy now, pay later users have financed a purchase with buy now, pay later knowing that they couldn't afford it at the time. So using it because they can't afford it, which is low-key what it's there for, but we'll get into it.
Lizzy: We'll get into it.
Lissa: Well, we know there's more to life than numbers and statistics, so let's talk about it. Is buy now, pay later worth it?
Lizzy: All right. Have you ever used a buy now, pay later service?
Lissa: I don't think I've ever used the popular ones like-
Lizzy: Affirm.
Lissa: ... Affirm.
Lizzy: So yeah, for example-
Lissa: Klarna.
Lizzy: ... Affirm, Klarna.
Lissa: There's a lot of other ones.
Lizzy: There's, yeah, a bunch of other... Afterpay is really common. PayPal has one.
Lissa: I don't think I've ever used it for consumer goods or anything that wasn't a necessity. The only thing like it that I can probably say that I've used was for medical, like CareCredit. I think that's a whole different arena.
Lizzy: I think that's a different topic.
Lissa: Yeah, but it's like actually I think I did CareCredit for a non-necessity. I think I might've used it to get veneers or something like that, something cosmetic.
Lizzy: Oh, interesting.
Lissa: I think. I can't remember. This was so long ago. But that is where I wanted something now and then I just ended up paying for it in installments later. So that's the same concept. But buy now, pay later, I think, is more so for consumer goods and services.
Lizzy: Typically, yeah. And so for some context of why I wanted to do this episode, a few things. So the fund that I'm a co-founder of, it's an alternative credit or private credit. And so what that usually means is financing that's not through a bank. And so a lot of the things that we look at is financing for businesses or lending to lenders who are giving out smaller ticket loans. We don't directly do anything in buy now, pay later, but it's in the same arena. So I'm very familiar with this and the benefits of it, the pros and cons, and the players in the space. And I keep seeing a lot of interesting headlines. So one I saw just a couple of weeks ago was that buy now, pay later is now available on DoorDash. And so there were all these jokes all over Twitter around financing your Chipotle and things like that. And it's for a $35 minimum, but still you would think that that is something you can pay for when you buy it.
Lissa: Otherwise, don't get it.
Lizzy: Yeah, exactly. And then the other one was that just recently, about 60% of general admission tickets to Coachella were financed using buy now, pay later.
Lissa: Do you know if there was interest associated with that?
Lizzy: I believe so.
Lissa: Okay.
Lizzy: Yeah.
Lissa: So buy now, pay later, I think that sometimes it's offered for 0% interest so long as you pay it within-
Lizzy: The certain period.
Lissa: ... a certain period.
Lizzy: So it's just a payment plan.
Lissa: Yeah, whereas other times there's an interest rate similar to getting a loan or a credit card where you are paying your installments, but you're paying more than what the item would have been if you bought it at once.
Lizzy: And it often ranges because my first instinct would be, okay, what's different from that in a credit card? Sometimes the interest rate is much lower and sometimes it's not. So I think some of the psychology is, and this is the interesting part of it, I can't think of a specific example but I have used it, I'm sure, for what felt like a large lump sum purchase and I wanted to break it up into smaller payments that, let's say it's $1,000. But I know that I can easily afford $100 a month of extra costs so I might break it up. I typically would do it if there's no interest for a certain period. And my reasoning is silly, is I don't like to see my liquid balance go down by that much.
Lissa: That's not silly. A lot of people use it for that reason.
Lizzy: Yeah. And it's not that I don't have it. I just paid $15,000 to furnish my apartment. I have the money but I feel less secure if my savings account goes down by that much. And so that's an interesting psychology. That also relates to when there's a payment, how much does that... Or when there's interest, am I willing to pay an extra $5 a month to have that peace of mind that I have this liquid cash still? And what's the limit of that? And there is some value, the time value of money. So if I have that in an interest-bearing savings account, which I usually do or if it's in the market, you can recoup that interest. But there's a lot of mindset stuff going on.
Lissa: So for these buy now, pay later offers where there is 0% interest, what is the benefit to the merchant or the buy now, pay later provider?
Lizzy: I think that most people don't pay it off in that period. So for example, this isn't a buy now, pay later but I've used it multiple times is the Wayfair credit card. And it had usually... Or I think I've used Best Buy as well. It usually has a 12-month interest or no interest period.
Lissa: I have had that for Home Depot.
Lizzy: And so that's often if you're doing a big purchase, I did it when we furnished our house, there's a minimum payment. Let's say my interest-saving payment is 300, $400 a month. I can make that, but the actual minimum payment might be $60 a month. So some people probably accidentally only pay the minimum and then accrue interest. And others, they tell themselves they're going to pay it off and then they don't.
Lissa: So what I'm getting at is is this a predatory financing-
Lizzy: Yeah.
Lissa: ... product?
Lizzy: I think it can be because it can prey or exploit, I was going to say exploitate, the just inherent consumer behavior, the buying patterns of like, "Oh, I can't afford this right now but in the future I can." People I think tend to assume they're always going to be in a better position in the future financially. "I'll be able to pay this off next year because I'm going to get this raise or I'm going to stop spending so much. I'm going to just tighten up my budget." And the reality is that doesn't always happen.
I also think it is not the same as but akin to payday advances or a lot of these cash now type of things that you often see in low-income communities that are deliberately exploitative of people who don't have the cashflow that they need. And there is an element of that to me that I don't like. At the same time, it can be a tool.
Lissa: Yeah, okay. So let's talk costs. Financial cost of using buy now, pay later is if there's interest or even if there's 0% interest for a certain period of time, if you don't pay it off, then you'll have to pay interest later. So that's the financial thoughts.
Lizzy: That's a big... I also think there's some element of, like I was saying, okay, I can afford $100 a month pretty easily, but if you do that a few times, that becomes a big monthly burden, a big recurring debt. And so there's a mindset thing depending on how you approach your finances that make it seem very easy and accessible and you can just absorb this cost and it's easy to get out over your skis with it and to take on more than you can really afford, especially if you are literally taking on more than you can afford because you know don't have the money for it. And then you can get yourself underwater and in a really challenging position. And then it feeds on itself because you're like, "Okay, I can't afford this now, so let me just finance it because somehow I'm going to get out of this."
Lissa: Yeah, you're forever chasing.
Lizzy: Yes.
Lissa: So I think that ties to the mental costs, emotional costs, energy costs. I had a client once who had four different buy now, pay laters at the same time. And they were all things that she felt she needed at that time, couldn't wait to save money for it, needed it now. But when I saw the stress that it put on her to have four different payments going out every month and just draining her account, we had to sit down and talk about, "All right, once you get out of this, how do we prevent you from falling into this in the future?" Because of the fact that even though you were able to finance the thing and get it sooner than later, you're in stress this entire time. Is that stress really worth it?
Lizzy: Yeah, absolutely. And the time between when you have it, the ongoing length of it, and then there's a guilt feeling and even a shame. And we've alluded to financial shame a lot is one of the biggest emotions associated with finances of like, "Oh God, I shouldn't have done that," regret in the stats.
And it can go both ways. I remember I was in Paris and I was going through a hard time and I'm like, "I'm going to buy myself something nice." And I bought myself a diamond ring and I felt so guilty about it even though I could afford it. And I remembered messaging you and getting you to help me-
Lissa: Get past it.
Lizzy: ... get past it. But I have an option through my credit card to basically buy now, pay later on certain large purchases even on my credit card where there's a very low interest or a no interest period. And so I did that. I was like, "I'm not feeling comfortable that I made this choice. I'm going to do it." And then I always come back a little bit later and I'm like, "Let me pay it off to get on a clean slate." And so I usually end up paying it off early-
Lissa: Sooner.
Lizzy: ... sooner just to, "All right, I need a level set and get back to zero," because I tend to have a zero balance on my credit card. That's one other small cost is if you do that through your credit card, it'll tell you your interest saving balance. But this is very nichey on YNAB, a tool that we both use for budgeting. It has both of them together. So even the one that's on a payment plan, so it's harder to track and know what your debt really is. And again, that creates that stress and that burden. So there's a lot of mental and emotional elements to it.
Lissa: Okay. So those are a little bit about the costs. Now, in your experience, who have you seen use these features?
Lizzy: So I think my possibly unfair and not backed by evidence association is that it's for consumer spending that's shopping. But now that I'm thinking about it, I want to be fair and think of purchases can be lumpy. So you may have your traditional monthly expenditures, but there are certain times of year when a big thing comes up. It might be an insurance premium or I have to pay my accountant in April. That's a business cost. But what about buying school clothes for four kids?
And sure in an ideal world, you're saving every month for that to build up a sum, but that's not always happening. But maybe the alternative is you're buying it now and just paying it off every month until the next year and that works for you, or Christmas. Or these big chunky things, buying tires, big expenses where I think maybe I'm challenging my own preconceived notions and it's actually a tool for someone to navigate their finances more smoothly.
Lissa: Yeah. Well, that's how I feel about loans and credit in general. A lot of times we catch ourselves saying how predatory it is, which it is and can be, but it's a financial tool that you don't have to use. No one's making you use it and you can use it for your advantage or not.
So similar to you, I think for a long time, I had a lot of negative association with buy now, pay later. It's predatory. They're just trying to get me to spend more and they're going after people who can't afford things. And then I saw a post sometime maybe last year from a fellow influencer friend where she was basically saying buy now, pay later doesn't automatically make you an irresponsible spender. And I'm like, "Oh, interesting. Tell me more."
Lizzy: Which first of all, that is so interesting that that's how we label ourselves. I use this tool so I am irresponsible.
Lissa: Yeah, not true.
Lizzy: Yes.
Lissa: Not true. And so what she went on to say was that there are some people who use something like this similar to how you alluded to using it because psychologically, they felt better even though they had the money, they felt better about paying a couple of hundred a month versus 2,000 all at once because it just felt more secure for them and more structured. And they're cool with paying this payment once a month. Obviously that can easily snowball if you just take on buy now, pay later for everything and you're not actually tracking and you don't know that you have the money. So it could be a slippery slope, but I don't think... It wouldn't exist if it wasn't a great tool for some people.
Lizzy: Right, right. Yeah. I think what I keep coming back to when I think about it in my head, my own accounting and budgeting system and how it translates to that and how I manage my money and feel about how I manage my money. And I think it would be much more challenging and potentially riskier for someone that doesn't have a system in place or that doesn't actively monitor their spending because then you can get into that area of, "I don't even know, money's just coming out all the time." You don't have kind of this home base to ground you from.
Lissa: So I'm going to talk through some of the benefits and downsides that I had pulled from some article. So benefits, buy now, pay later can often be interest-free. Like we said, if you pay within the payment period, you might not even have to pay an extra cent. Flexible payments, sometimes they offer promotional discounts for using it. And it is accessible for people who don't have traditional credit history. So it can be a way to finance if you can't even get a credit card.
Lizzy: That's a great point. I didn't even think about that.
Lissa: Some downsides, not surprisingly, it can encourage overspending. There can be late fees. It's actually one-sided when it comes to credit reporting. I believe most buy now, pay later doesn't help your credit history-
Lizzy: Because you're not building.
Lissa: ... when you make payments. You're not building. But if you mess up, it's going to get reported and it can hurt your credit.
Lizzy: Good to know. Good to know.
Lissa: And downside compared to credit cards is less fraud protection. So when you purchase things on credit cards, you typically have pretty good fraud protection if someone steals your card, or you have protections. Whereas if you're doing buy now, pay later, you don't have that for items.
Lizzy: I'm laughing because I accidentally reported my rent payment fraudulent.
Lissa: Oh, yeah.
Lizzy: Did I tell you about that?
Lissa: We saw-
Lizzy: And it was this whole fiasco.
Lissa: Side story.
Lizzy: It was so stupid.
Lissa: Liz saw a charge she didn't recognize. It was her new apartment complex because she didn't know. You know how you don't know sometimes how it's going to pop up on your statement.
Lizzy: And it was some weird thing that when I Googled it, it was phishing software. That was the first thing that came up and I was like, "It was $2,500." I'm like, "I didn't pay for this." And then I went down this whole thing and they canceled it and they refunded the money and then it got me in trouble with my landlord. Anyway.
Lissa: Anyway. So on the credit card piece, I'm a credit card user. We haven't done a credit card episode.
Lizzy: We have.
Lissa: Oh, we have. We have, yeah.
Lizzy: Yeah.
Lissa: So we've talked about why we're proponents for credit cards, the points, the rewards, if you are responsible with how you use them. I also like them because it's like that one step removed from my bank account and I feel like that's another potential benefit for buy now, pay later. It's like you said, you're not taking all that money out of your bank account at once, but you have that mediator in between.
Lizzy: Well, that's actually another thing I want to bring up around the strategic use of it. And I think of this more from a business standpoint, but it's cashflow management. So depending on just how your finances work, you may have different needs at different times, but that don't exactly align with when money gets deposited into your account. And I think of that in a business because, for example, you may not be getting a regular paycheck. You may be getting paid. Sometimes it might take three months to get paid from work that you've done, but you may still have to pay payroll. That's a very common one. And so there's a mismatch of your assets and liabilities.
And so sometimes you just need that line of credit or that extra help to give you in advance basically and get it out the door so you can bide your time until money comes in. And you can approach that the same way. And I think of a credit card that way as well. It's not actually leaving my account, so I have some more wiggle room in how I manage it. It gives me breathing room. But I hadn't thought about the fact that that's not a tool available to people who have limited credit or who have had whatever issues that damage their credit. God forbid someone takes out credit cards in your name where we know people that's happened to. So now that I think about it, this can be very useful for situations like that.
Lissa: So something, I think I mentioned it in our credit card episode now that I'm thinking about it. But back in college, I got an argument with a friend because my computer or laptop broke and I was in school and I felt that I needed it to take notes. There's no way you go to these lectures and you're writing everything down. It's impossible. You need to type. And so my laptop broke. I needed a new one to finish out the quarter or the semester or whatever, and I didn't have the money for it. And I said I was going to put it on a credit card and just pay off the credit card later, pay the interest. And my friend, he was so against it and basically said, "No, that's a slippery slope. It's bad. Credit is bad." And then now in hindsight, I can see that we just had different views on the use of credit and probably both had our own traumas with debt and credit in our own upbringing and stuff.
So all that to say, now I can see all the sides. We can acknowledge that there are certain systems like this that could be predatory. They target people who actually can't afford things just so they can make a buck. But I'm glad we can see the other side where it's more of a strategic thing. On that note, on the laptop piece, I felt at that time I needed it. There was no other way around this. Is that facts> I don't know. I could have found another way. I could have borrowed a laptop. I could have... But I in that moment felt like I needed it. And so I wanted to bring that up because I feel like I run into conversations about things like that with clients a lot where it's like, "No, I have to." And I'm like, "Do you, or can you wait two more months to upgrade your phone? Can you save for it first? Or is this an absolute need?"
Lizzy: Right. No, I think that's a great point of especially if you can be an impulsive spender, which I know I have that in me too of like, "Take a second. Think about it." Because the ease, that's one of the biggest differences that with these buy now, pay later systems is there used to be layaway. I think of that as a kid and we were low income.
Lissa: Explain it to the people. What is layaway?
Lizzy: Oh, God. So layaway, it makes me think of a Walmart or Mervin's was a department store that had it. Basically you're putting an item on hold and making payments on it, but it's set aside for you.
Lissa: So you don't actually get to go home with it.
Lizzy: You don't get to go home with it. But it's like you're saving up for it, but you're chipping away at it. So it's like a payment plan, but you go home with it at the end.
Lissa: Got it.
Lizzy: And so for I think of my family where we just were strapped for cash all the time, my mom would put something on layaway for Christmas to be able to chip away at something and come home with it. That's what it makes me think of.
Lissa: This is the opposite now with buy now, pay later. You get the item now.
Lizzy: Right. Exactly. And so the ease, how quick it is, you don't have to go through this in-depth process of running your credit. It's just at a click of a button. That can be dangerous. Sometimes you need that stop even if it's just something you want. "All right. Am I still thinking about it a couple of days later? All right. Sure. Go ahead."
But I will say the flip side. Since you brought up a laptop, I always finance a laptop. I usually buy a MacBook. I've done it multiple times now. It's interest-free financing through Apple. And I had an opposite experience where I was in Nashville on a trip. My laptop got water on it on the plane. I had a project due in two days and I need this. This is for my livelihood. I'm going to go to the Apple Store and easily buy a $3,000 very nice laptop and feel no stress about it because I know I can finance it. I know I can afford it. I can do it without even blinking. And granted that's because I know I have the money in my business to pay it off, there's more certainty there. But that is also a nice piece of mind that I don't have to feel any type of way about it.
Lissa: Interestingly, because I just bought a expensive laptop in the last year and I paid it in full. I did not finance it-
Lizzy: Interesting.
Lissa: ... even though there was 0% financing available to me. I think I'm the opposite. I don't like having multiple payments. I'd rather it just be paid now.
Lizzy: I don't know what the rule of thumb for me is on that because I'm sometimes both. I think for personal expenses, I tend to prefer to just pay it off and I want to know exactly what I have. For business expenses, I don't mind financing. I don't know why. But then sometimes I will get to a point where I'm like, "I just want to not think about this now."
Lissa: I want to go back to the DoorDash and the Coachella stats that you said, because I think now that we're getting into what you're actually buying, it comes into play. So that DoorDash one was it's a new service where you can, for orders of $35 or more, you can finance it into four interest-free payments-
Lizzy: Or defer payment.
Lissa: ... or defer payment. So not to offend anyone here who might use this, why would someone use this?
Lizzy: So my gut instinct is maybe not very fair or generous, is that maybe because we've had a food delivery episode, I think you're probably buying something you can't afford. Because if you really are that strapped for money, why are you using DoorDash? There are so many more cost-effective ways to get food.
Lissa: Yeah.
Lizzy: Right?
Lissa: Go walk to McDonald's.
Lizzy: Yeah, exactly. So maybe not being generous, but that's what I think of. Or I can also think of you're having a big gathering that maybe is a big one-time expense. You're going to have a lot of people over. You're going to order stuff.
Lissa: Maybe they pay you later and then-
Lizzy: I don't know. It's hard for me to think of it in any other way than you just don't have $35 or more.
Lissa: Right, okay. So let's compare DoorDash, the potential of financing your DoorDash delivery order compared to this Coachella ticket one. I do think there's a difference. This is a difference that I see.
You do DoorDash is food and you finance your, say, $50 food purchase and now you've eaten the food. The experience is gone. You're still paying it. You got to eat every day. So every day you're eating, but you're still paying for this meal that you ordered the other day.
Lizzy: I agree.
Lissa: Whereas Coachella tickets, I'm not excusing Coachella tickets, financing a Coachella ticket. We'll talk about that in a second, but I do see a difference. I see you finance this ticket. It's this one unique experience that's available once a year or twice a year because they do two weekends. You finance it. Maybe you're still paying it off after the concert, but you've gone to this festival, this concert, and you've had an amazing time. So you might not mind so much when those payments hit. You're like, "That was worth it because it was a great experience."
Lizzy: Right. Also, tickets are available at a specific window. I don't know if Coachella tickets are hard to get.
Lissa: Yeah, I think so.
Lizzy: So maybe you know you'll have the money but you don't have it today but you don't want to miss the opportunity to go. So I agree. I think it's different. And I think not that only very young people go to Coachella, but a lot do. And so maybe you only have a part-time job, but if it's important to you, I get the mindset of, "I don't want to miss out on this experience because I don't have it all today. And this makes it much more manageable for me." I think there is a very big difference of I'm consuming... That it's a consumable. I'm consuming it immediately. It is a low ticket item and it feels like it's free but it is not.
Lissa: It's not.
Lizzy: And so like, "Oh, well this doesn't even affect my bank account." I think that is much more predatory and it gets into that area where you can really dig yourself into a hole. And not saying that there aren't people who... There aren't times they don't have $50 in their bank account because I've probably been there, but I think I am more comfortable with it for large purchases.
Lissa: Yeah. Well, when I think about it, I feel like there's a lot of... There are some personal finance experts who would even frown at the Coachella ticket financing more so like you know when it happens every year. If you really want to go to it next year, start saving for it. But no.
Lizzy: You got to live your life, right?
Lissa: Yeah.
Lizzy: What if life happens? Yeah, you get a flat tire, you have a medical expense. I think that's an easy mindset if everything is status quo all the time.
Lissa: But it's not.
Lizzy: But it's not.
Lissa: Life is life.
Lizzy: What if you have... My family's birthdays are all October, November, December, January with Christmas and all of these holiday things like. That is very different spending pattern than I'm going to have January through June. It's not a steady pace. And so I think if you have awareness of your finances and you're being smart about it, fuck off.
Lissa: Yeah, but not for DoorDash.
Lizzy: I'm sure someone could come up with a reason psychologically why it helps them or whatever.I can't think of it right now, but-
Lissa: You're eating too. You're doing it to eat and then you're going to eat the next day. Are you going to DoorDash and not-
Lizzy: Everyday.
Lissa: ... finance it again or you're just going to do it normally the next day?
Lizzy: Okay. Here's a potential argument. Not the best one, but you lose your job. You are struggling. You don't have money right now, but you know you will get money again. Or maybe you're even started a new job and haven't gotten a paycheck yet. It's that holding pattern of like, "I will have this later, but I don't have it right now. Does that mean..."
Lissa: And I got to eat.
Lizzy: "... I have to eat ramen for a month?"
Lissa: Right. No.
Lizzy: That's why-
Lissa: You could maybe drive yourself or walk somewhere.
Lizzy: Actually.
Lissa: That's a good call.
Lizzy: I'm trying to give people the benefit of the doubt.
Lissa: I wanted you to play devil's advocate a little because I don't want to always come off as, like I said, I used to be so judgey with the buy now, pay later. And immediately when I heard the DoorDashing that you said, I'm like, "Wait."
Lizzy: That was my reaction too, yeah.
Lissa: I guess there are some scenarios where it could make strategic sense. I just think that obviously a company's going to do that for their own profit motive.
Lizzy: Because they know that at the end of the day, most people are going to pay more.
Lissa: Yeah. Otherwise, they-
Lizzy: That's why they exist.
Lissa: Yeah. Otherwise, they wouldn't offer an interest-free thing.
Lizzy: Yeah.
Lissa: Yeah.
Lizzy: All right, you ready?
Lissa: All right. 20 cents?
Lizzy: 20 cents.
Lissa: 20 cents is the segment of the show where both Lizzy and myself, Lissa, each get 60 seconds to give our 2 cents on today's topic, whether it's a net positive or net negative for buy now, pay later. Where does 20 cents come from?
Lizzy: You all get the opinion of two dimes.
Lissa: Two dimes. All right, this is going to be interesting. Liz, you're up first. 60 seconds on the clock. Is buy now, pay later worth it?
Lizzy: I'm struggling with this one actually. I thought I was going to be net negative. I'm going to give a nuanced answer. In general, I'm actually net positive for the strategic uses of it and understanding that life is hard, finances are hard, there's a lot of emotions tied to it. And if this is something that makes you feel better about how you manage your money while also not getting you deep into debt or putting you at risk, do you.
That said, for me personally, I have found that I usually just end up paying it off anyway. And for the most part, I don't use it. I might go through the thought process like, "Oh, I'm buying this. I feel a little guilty. Should I just finance it?" And then I'll be like, "No, just pay it. It's not worth it." So I am personally a net negative, generally a net positive.
Lissa: Interesting. All right. But since personally, we're going to go-
Lizzy: Personally, negative.
Lissa: Net negative. All right. Interesting.
Lizzy: All right. What about you, Lissa?
Lissa: I too, personally, am going to go net negative. And that's simply because for me, when I make a big purchase, I'm talking specifically about the buy now, pay later companies, Affirm, Klarna, all those. I never use those. I'm negative on those. That's not to say I don't finance things.
Lizzy: Sure.
Lissa: I finance things using other credit lines and things like that if I really want to finance it, like we're financing our wedding. We used it.
Lizzy: Yeah, sure.
Lissa: And so that's why I'm a net negative on buy now, pay later services. But even generally, I tend to, if I have the money, I'd rather pay it off and not think about it versus having this installment follow me into the future. So I just tend to lean towards, "Let me just get it out the way," especially if I have the money. And if I don't have the money, then it better be a damn good reason why I'm getting it when I don't have the money for it.
Lizzy: That made me think of one more, I guess, negative aspect of it with any kind of financing is it makes it harder to know how much you actually have, what your financial standing is, unless you're monitoring and tracking. It's not like I'm just going to look at my bank account and know this is what I have because it's like, "Well, I have this balance, but how much does it have to be paid off this month?"
Lissa: Every month.
Lizzy: "And how much is for next month?" It makes it trickier. So yeah, that is one of the other costs.
Lissa: Yeah. Well, remember, this is what we think at this moment in time. Both Lizzy and myself are net negative for buy now, pay later with a lot of nuances to it.
Lizzy: Yeah, a lot.
Lissa: But no one can make that decision but you. What do you think? Is buy now, pay later worth it?
Lizzy: Hit us up. Let us know what you think. DM us on Instagram @netnetpodcast or email us at hi@netnetpodcast.com. And if you want to follow us individually, here's where you can find us.
Lissa: I'm at Wealth for Women of Color on TikTok, YouTube, and Instagram.
Lizzy: And I'm-
Lissa: Where are you at, Liz?
Lizzy: And I'm @live_well_lizzy on Instagram and TikTok.
Lissa: All references, statistics, and resources mentioned can be found in our show notes. This podcast is for educational, informational, and entertainment purposes only, and should not be constituted as financial advice. Remember to always do your own research, consult a professional as needed, and feel empowered to make your own decisions.