More People Use Buy Now Pay Later Plans | Personal Finance

Many people in America now use buy now, pay later plans when they shop online. A new survey says about half of Americans have tried these payment plans. Around 10% said they use them often.

These plans let shoppers buy something now and pay for it in small parts later. Many online stores now offer this choice at checkout. Some companies also give shoppers special cards to use in local stores.

Big companies like Affirm, Afterpay and Klarna are leading the market. Large banks and credit card companies are also joining the trend.

The survey found that people with lower incomes use these plans more often. Many shoppers said they use them because they do not have enough money to pay the full price right away.

Experts say the plans can help in some cases. They may be useful for a needed item like a home product or school supplies. Small payments can make it easier for families to manage their monthly budget.

But experts also warn about the risks.

Financial expert Ted Rossman said people may spend too much when payments are split into smaller amounts. He said some shoppers forget how many payments they still owe.

A recent survey found that many users had problems. Some missed payments. Others bought things they later regretted. Some users also ended up with more debt.

Most short plans do not charge interest if payments are made on time. But longer plans may charge high interest rates like credit cards. Experts say shoppers should always read the rules before signing up.

Rossman said buy now pay later works best for important things people truly need. He warned people not to use it too much for food delivery, snacks or impulse shopping.

Buy now pay later plans are growing fast across America. Still, money experts say careful spending is the best way to stay out of debt.