With the holidays just around the corner, it’s time to start shopping for gifts for all your loved ones. It can be an overwhelming process, finding the perfect gift for every person in the family. What’s more overwhelming than finding the perfect gift for everyone is paying for it. The best way to holiday shop would be to plan and save your money accordingly. However, life doesn’t always work out that way – perhaps your favorite aunt announces she’ll be in town after all. Perhaps your son has his heart set on the latest – most expensive – new video game console.

These unexpected holiday gifts could really hurt your checkbook. Between long gift lists and longer grocery lists for holiday dinners, every dollar counts. What if you could get that console or a cashmere sweater for your aunt, but not have to pay for it just yet? Through Buy Now Pay Later, this is possible. Think of BNPL as layaway in reverse – rather than paying now and receiving the item later, you receive the item now (after putting a little money down) and then pay the remainder over time. BNPL is the layaway of the instant gratification generation.

So How Does it Work?

Companies like Affirm or Klarna partner with retailers, and you’ll see the option for their checkout alongside the retailer’s. When you use a BNPL you’ll typically make 4 payments every 2 weeks. There are no fees or interest when you select this payment timeline and pay on time. This makes it a great option for breaking up the cost of a single big-ticket item during the holidays until your next paycheck arrives.

Sounds Awesome! Why Not Buy Everything With It?

BNPL is great! It’s the perfect way to break down a large sticker price into something more manageable, especially at a time like the holidays when our budgets can be worn thin. However, it’s easy to lose track, especially if you’re just looking at the biweekly payments. It’s key to keep a budget as always and to account for any BNPL purchases. BNPL should make budgeting easier; it should not enable you to spend recklessly. Ask yourself if you can make the payments on time – and be realistic with yourself.  

Our recommendation is that you pick one or two large items that you – or your loved ones – truly must have, but which are a bit expensive alongside the rest of the season’s costs. Pick the BNPL program and timeline that fits your needs. Some even allow you to build your credit with on-time payments. This is a great feature for those with young or poor credit that needs rehabbing. From there keep careful account of the due dates and the balances coming due. Avoid any late payments as they result in both late fees and negative reports to your credit.

BNPL can be a great way to soften the blow of that gift for the one sibling with expensive tastes – or the mother-in-law you desperately want to impress – however no one wants you going into debt for a gift. Plan properly, be realistic with yourself, and make your payments on time.