BNPL is everywhere at checkout—and it can be helpful. But the gotchas are real. Here are the
biggest traps and how to sidestep each one.

1. Stacking plans across apps
   Trap: Two payments here, three there—suddenly you’ve got six active loans.
   Dodge: Use one BNPL app, set a monthly cap, and link a calendar reminder for each
   installment.
2. Late fees and “phantom” interest
   Trap: Missed payments trigger late fees; some long-term plans charge interest.
   Dodge: Choose interest-free, short-term plans, and enable autopay a few days after payday.
3. Overdrafts from badly timed autopay
   Trap: Autopay hits your debit card before your paycheck, causing overdraft fees.
   Dodge: Align due dates to just after payday or use a separate “bills” account with a buffer.
4. Returns and refunds can get messy
   Trap: Merchants may take weeks to process returns while installments keep posting.
   Dodge: Keep proof of return, pause further payments in the app if possible, and follow up
   weekly.
5. Weak purchase protections vs. credit cards

Trap: Dispute rights and purchase protections can be thinner than major credit cards.
Dodge: For high-ticket or fragile items, consider a credit card with strong protections instead.

6. Credit score confusion
   Trap: Most BNPL plans don’t help build credit, but missed payments can go to collections.
   Dodge: Assume late BNPL payments can hurt you. If you want to build credit, use a secured
   card or traditional installment loan paid on time.
7. “Zero interest” but high merchant markups
   Trap: Some prices are effectively padded to cover BNPL costs, so you pay more.
   Dodge: Compare the cash/credit price to the BNPL price. If BNPL is higher, walk away.
8. Using BNPL for essentials
   Trap: Groceries and gas on installment can signal a budget shortfall and create a debt spiral.
   Dodge: Reserve BNPL for planned, non-essential purchases. Build a small cash buffer for
   essentials.
9. Subscription creep
   Trap: Adding BNPL for add-ons, warranties, and subscriptions bloats monthly obligations.
   Dodge: Unbundle. Pay for the item only; skip extras unless you genuinely need them.
10. Privacy and data sharing
    Trap: BNPL providers can collect detailed purchase data and share it for marketing.
    Dodge: Review privacy settings in the app. Opt out of data sharing where possible.
    Simple system: Add all BNPL due dates to your calendar, cap your total monthly BNPL payments
    to a fixed percentage of take-home pay (e.g., 5%), and audit your plans every payday. If you’re
    carrying balances, pause new BNPL purchases until you’re back to zero.
    Not investment advice. Do your own research and consider talking with a fiduciary advisor.
    AI used to help write this article.