A woman on Reddit recently posed a seemingly simple question: If she can easily afford a $1,700 purchase, is there any real downside to using a Buy Now, Pay Later service like Klarna (NYSE:KLAR) or Afterpay to split the payment?
“Unlike a credit card, there’s no interest charged, and I’m making interest when the money is sitting in my account, so… why not?” she asked in r/personalfinance. “Am I missing some obvious downside?”
“In theory, there’s no downside,” one Redditor wrote. “In practice, it conditions you to buy more than you can afford.”
Don’t Miss:
That theme came up repeatedly in the thread. Many said services like Klarna may appear harmless if you’re financially responsible and use them occasionally. But the real danger is behavioral: the more often people split up payments, the easier it becomes to justify buying things they wouldn’t normally purchase.
“It gives the illusion of having more purchasing power,” another person said. “Someone might not buy a $2,000 item, but they might very well buy it if it’s ‘only’ $500 every 2 weeks.”
Multiple commenters pointed out that this structure encourages overspending, especially for those living paycheck to paycheck.
Others cautioned that while using BNPL once or twice may seem harmless, it’s a slippery slope. “We had someone here a few months ago who had $900 in monthly Klarna payments and was wondering how to get out of it because they couldn’t afford it,” one commenter shared. “50 bucks here, 30 bucks there starts to add up.”
Trending: $100k+ in investable assets? Match with a fiduciary advisor for free to learn how you can maximize your retirement and save on taxes – no cost, no obligation.
Some broke down the numbers to show why the benefit of splitting the cost isn’t as compelling as it sounds. Parking $1,700 in a high-yield savings account might earn around $3 to $5 in interest over six weeks.
“That juice can’t possibly be worth the squeeze,” one person wrote. Another chimed in: “We’re literally talking about a few dollars maximum.”
Others said credit cards offer more upside. A typical 2% cashback card would give you $34 on a $1,700 purchase, much more than a savings account would earn during the same period. Plus, many credit cards offer purchase protection and chargeback options.
