Skip to main contentSkip to main content
You have permission to edit this article.

NerdWallet: What to do if you buy now, can't pay later

  • 0
Holiday Debt Payoff

While shoppers are planning to spend less this year than last, according to a NerdWallet survey, more are also planning to use credit cards to purchase gifts.

Buy now, pay later" can be a convenient payment method. But if you don't factor the recurring payments into your budget, it can get messy.

This is especially true if you're juggling multiple buy now, pay later plans on top of other debts. The credit inquiries that some lenders conduct when you apply for any type of credit don't always offer visibility into buy now, pay later plans you may hold with different companies, so it may be possible to bite off more than you can chew.

Equifax, one of the three major credit bureaus, is aiming to change that in the first quarter of 2022 by formalizing a process for including buy now, pay later information on credit reports.

"Part of the push here is to support responsible lending," says Mark Luber, chief product officer for U.S. information solutions at Equifax. "When a company lends, they want to make sure the consumer can handle that new credit account and can in fact pay it back."

An unpaid buy now, pay later balance could get sent to collections and potentially hurt your credit history. Late fees may also apply, depending on the company. And you could be barred from using the service temporarily or permanently.

Take action early to avoid these consequences and explore some options that can free up money to keep your finances on track.


Revisit your budget (or create one) to understand where money is going. Consider adjustments on nonessential expenses.

"Do you need all of those subscription services you have now? Is there a way to get a cheaper cellphone plan or a cheaper cable plan or shop for cheaper insurance?" says Katie Bossler, quality assurance specialist at GreenPath, a nonprofit credit counseling agency.

Prioritize essentials like housing, food, utilities and medicine, and look for ways to save in other areas. Financial assistance with bills might be offered for those with income under a certain threshold.


It might be possible to return the item to the merchant for reimbursement. Some buy now, pay later companies don't refund the money paid on interest, but you may come close to being made whole. Payments may still be due while the refund is pending.

If a merchant won't accept a return, consider selling the item to recoup some of the money. You may find a buyer on social media marketplaces, apps or websites. Some online marketplaces may take a cut of the sale, so understand the terms before listing the item.


Before missing a payment, get in touch with the buy now, pay later company to explore options. Each company has different policies on whether you may extend the payment due date or change it.

Bossler recommends trying to align your due dates with the paycheck or pay period that offers you the most breathing room. If your plan requires biweekly payments, "it might be possible to switch to a monthly payment," she says.

Or, if you originally used a debit card to set up the buy now, pay later plan, ask if you can switch the payment method to a credit card. You may incur interest with a credit card and will have to keep up with that bill, but it can buy some time if you're worried about overdraft or late fees.


If your financial situation has changed because of circumstances beyond your control, like unemployment or a family emergency, the buy now, pay later company might provide financial hardship assistance.

Afterpay, for instance, can offer flexible payment timelines with no additional fees for eligible people experiencing hardship, according to a spokesperson for the company. But it's important to contact the company for help.


Taking on additional hours at work or earning supplemental income through a side job — driving for a rideshare or delivery service, for instance — may offer a way to pay off your buy now, pay later debt more quickly.


Consolidation may not be ideal, or even permitted, for buy now, pay later plans, but consolidating high-interest debts elsewhere can free up money:

— With good credit (FICO scores of 690 or higher), you may qualify for a balance transfer credit card with a 0% intro APR, allowing you to move debt from a card with a higher APR. You'll typically pay a fee — at least 3% of the amount transferred — but it might be worth it to save on interest for a year or more.

— For debt that will take longer to pay off, you could consider a low-interest personal loan. Factor in the cost of the origination fee and monthly payment to determine whether you'll save money over time.

— A debt management plan with a nonprofit credit counseling agency may offer a way to consolidate credit card debt and other balances into one payment at a fixed rate. You'll owe a fee, but the savings usually outweigh the cost.


Be the first to know

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Most Popular

Summer Lee has won a five-way Democratic primary for a Pittsburgh-based U.S. House seat. That makes her the favorite in the heavily Democratic district to win the fall general election and become the first Black woman elected to Congress from Pennsylvania. Friday was the fourth day of counting ballots after Tuesday’s primary in the closely contested race for the open seat. Lee is a second-term state House member, lawyer and former labor organizer. Lee beat out second-place Steve Irwin, who was endorsed by the Allegheny County Democratic Party and backed by prominent Democrats from the county. Lee will face Republican nominee Mike Doyle in the fall general election.

A federal court says mail-in ballots without a required date on the return envelope must be allowed in a 2021 Pennsylvania county judge race. The decision issued late Friday by the 3rd U.S. Circuit Court of Appeals could complicate the ongoing process of vote counting in the state’s neck-and-neck U.S. Senate Republican primary. The number of mail and absentee votes at issue in the Lehigh County judge race is 257, enough to potentially sway the results. But the decision could also be a factor in the Senate primary, where television physician Dr. Mehmet Oz and former hedge fund executive David McCormick are waiting for official results.

One of the Pennsylvania Legislature’s most powerful Republicans lost and another is in real danger of going down to defeat, both targeted by challengers from the right. Counting continued Wednesday in the primary election, with state Sen. Pat Browne of Lehigh County a few dozen votes behind school board member and pilot Jarrett Coleman. State Rep. Stan Saylor of York County lost to Wendy Jo Fink, who promised to eliminate school property taxes. Both incumbents chair the Appropriations Committee in their respective chambers. Saylor was elected in 1992, Browne in 2005 after a decade in the state House.

Get up-to-the-minute news sent straight to your device.


News Alerts

Breaking News