SAINT LOUIS, Mo. — Buy-now, pay-later (BNPL) options are available online for just about everything. It is like a modern-day twist to those old layaway plans. But, is it too tempting or a good way to make ends meet? It depends on who you ask.
Sheree Davis is no stranger to BNPL, especially when it comes to handling unexpected family expenses.
"It's appropriate for the times," Davis said. "People are crunching numbers every day, and even for some of the things that we need, and now we have the ability to do the buy now, pay later."
As a lawyer, Davis is the type of person to read the fine print. Although she's pampered herself at times, she said the delayed payment option is pretty handy for her family's needs.
As more stores make adjustments for inflation and tighter budgets, companies like Walmart even allow people to pay for their groceries in installments.
Financial expert Dionne Motley from Legacy Changers Academy wants to remind everyone to take caution. While she understands why people turn to BNPL, she prefers other methods like saving, budgeting and using credit cards that offer rewards.
"If you have the option to get a credit card, that will allow for you to make the purchase," Motley said. "And as you're making the payments, you are able to build your credit. That's going to be a better option for you."
Davis is actually one of Motley's clients, and they've agreed on how BNPL can work for her budget. Davis budgets her purchases by allowing herself a small amount to spend each pay period, and the duration of payments has to be for a short amount of time.
"I try to keep it under $60 per payment," Davis said.
She said she typically uses BNPL for smaller payments she can pay off in two or three installments. For example, she recently used BNPL to buy athletic shoes for her son after realizing he needed a specific pair for a sports team.
Motley won't do BNPL for herself, but she acknowledges the realities that many people face.
"I'm not against it," she said. "I'm sympathetic to people's financial situations, but I would prefer to use a credit card that gives me cash back rewards, travel rewards, whatever the case may be."
Davis said BNPL gives her more flexibility, especially since many offers do not charge interest and run a soft inquiry on someone's credit.
"It's needed. It's appropriate," Davis said. "People can get the things that they need, and they can control the payment and the commitment. For the most part, it's free financing."