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ARTICLE · 15 JULY 2021

CFPB Blogs About Buy Now Pay Later

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On July 6, the CFPB posted a blog titled, "Should you buy now and pay later?" describing how buy now pay later (BNPL) deferred payment options work, and the benefits and risks that come with BNPL.

United StatesFinance and Banking
Moorari K. Shah
Moorari K. Shah
A.J. Dhaliwal
A.J. Dhaliwal
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On July 6, the CFPB posted a blog titled, "Should you buy now and pay later?" describing how buy now pay later (BNPL) deferred payment options work, and the benefits and risks that come with BNPL. Generally, if a consumer selects the BNPL option at an online checkout, "the purchase is . . . split into a payment schedule – typically four fixed payments made bi-weekly or monthly until the balance is paid in full." The CFPB points out that transaction approval takes minutes, with no interest, finance charges, or hard credit inquiries.

The CFPB cautions consumers to consider the following risks before selecting the BNPL purchase option:

  • Because you can qualify for BNPL without passing a hard credit inquiry, make sure you have a good sense of your finances and whether the payments will fit within your budget.

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