Buy now, pay later (BNPL) offers a simple borrowing experience, allowing consumers to split their purchase into down payments and installments. Holiday purchases with BNPL are expected to exceed $10 billion, with half of shoppers planning to use it. However, BNPL can lead to multiple loans with varying interest rates and hidden fees.

BNPL is popular among consumers under 40 and those with damaged credit. It offers more affordable credit access than traditional products. While interest rates vary, they are generally lower than credit cards or loans. However, BNPL can lead to overspending, missed payments, and financial risks.

Attorneys general are scrutinizing BNPL providers for transparency and consumer protection. Consumers are urged to understand loan terms, track payment due dates, and monitor account activity. Alternatives like 0% APR credit cards and personal loans offer financing options with lower interest rates and longer repayment periods.

Consider alternatives like 0% APR credit cards or personal loans to avoid the risks associated with BNPL. Personal loans offer lower interest rates but may extend debt repayment for up to seven years. Payday Alternative Loans (PALs) through credit unions provide small-balance loans with favorable interest rates and short repayment periods.

Read more at Yahoo Finance: Buy now, pay later is booming, and experts say the risks are growing