Definition
A short-term loan at checkout that splits a purchase into a few payments, often four payments over six weeks.
What it means
Buy now, pay later plans let you take an item now and pay in installments. The common format is four interest-free payments every two weeks, with the first due at purchase; longer plans may charge interest like other installment loans. Late fees, failed-payment fees from your bank and missed-payment rules vary by lender. A CFPB study found that BNPL users were more likely than non-users to carry high credit card balances and other debts, partly because it is easy to have several plans at once. Some BNPL lenders now report payments to credit reporting companies, so missed payments can hurt a credit record. Returns and disputes can be slower than with credit cards, since protections depend on the lender's terms and how you paid.
Example
A $400 purchase split into four payments is $100 at checkout and $100 every two weeks. Having five such plans at once means $500 due every two weeks on top of other bills.
Illustrative numbers only. Your situation will differ.