Finance

BNPL payment plans require careful budgeting to avoid costly fees, expert says

Published

19 hours ago

May 29, 2025

‘The Big Money Show’ co-hosts discuss buy now, pay later spending options and the impact it will now have on your credit score.

Using “buy now, pay later” (BNPL) has become increasingly common in recent years as people look to split up and finance purchases they make.

According to Credit Sesame financial analyst Richard Barrington, some key steps people should take as they utilize BNPL include budgeting beforehand, reviewing the terms of the plan, determining what fees could be associated and being prepared for automatic payments.

“If you need BNPL to be able to pay for something, you have to question how you’re going to come up with the money to make the BNPL payments when they come due,” he said, noting budgeting ahead of time can help someone figure out if they can foot the bill for what they’re buying and any debt they could build up because of it.

BUY NOW, PAY LATER PITFALLS: MANY CONSUMERS AREN’T PAY LOANS

He recommended reviewing what income will come in “over the term of the BNPL payments” and then subtracting “all the essential expenses you’ll have during that time” to help “see if you’ll have enough left over to cover BNPL payments.”

“If not, you risk missing one of those BNPL payments and incurring late fees,” he said.

Budgeting beforehand can “also help you avoid not being able to afford one of those essential expenses because you committed too much money” to BNPL, according to Barrington.

The Credit Sesame financial analyst urged people taking out BNPL loans to take a close look at the terms of the plan they’re signing up for.

“Know how much you have to pay and when,” Barrington said. “Also pay attention to what happens if you don’t make a payment on time.”

Knowing the timing and size of the BNPL payments can help avoid incurring a late fee, he said.

BNPL late fees averaged $7 for a loan taken out on a $135 purchase, according to the Federal Reserve Bank of Richmond.

Barrington advised “avoid signing a BNPL agreement you can’t take home and read first.”

“Many BNPL arrangements are made at the point of sale, like in a store. That means you’re trying to understand the terms while you’re in a hurry and with lots of distractions around,” he said. “Instead, take the agreement home with you to read, and then come back to the store to make the purchase. If it doesn’t seem worth that effort, perhaps you don’t really need to buy the item.”

Members of the public pass by a floor advertisement for tech firm Klarna, a European ecommerce company which allows users to buy now, pay later, or pay in installments. (Daniel Harvey Gonzalez/In Pictures via Getty Images / Getty Images)

BNPL can have “strict payment terms” that can lead to late fees, so it’s important to know what the costs associated with the plans could look like, according to Barrington.

“These fees may look like they’re fairly low dollar amounts, but since BNPL purchases are generally for relatively low-priced items, they can represent a large percentage of the purchase price,” he explained.

Some ways people can steer clear of late fees from BNPL include budgeting and knowing the terms of the installment plan they’re using.

On top of that, he said, creating calendar reminders or using automatic payment options can be helpful.

When it came to automatic BNPL payments, Barrington noted people should “pay close attention to the amount and schedule” because “otherwise you may find yourself hit with an overdraft fee if your bank account doesn’t have sufficient funds to cover the payments.”

COSTCO ROLLS OUT BUY NOW, PAY LATER FOR BIG ONLINE PURCHASES THROUGH AFFIRM

Some BNPL services make enrollment in automatic payments mandatory, he said.

However, people should not take out more than one out at a time, according to Barrington.

“People often turn to BNPL loans when they’re having trouble making ends meet,” he said. “That’s not going to get any easier if they take on multiple BNPL obligations that they’re going to have to come up with the money for in the months to come.”

Some retail experts and financial lending providers are saying buy now, pay later programs are the new layaway. (iStock / iStock)

He said to “avoid using BNPL for anything whose useful life lasts less time than it will take you to finish paying off the BNPL loan.”

BUY NOW, PAY LATER USAGE FOR GROCERIES NEARLY DOUBLES AS CONSUMERS STRUGGLE WITH FOOD COSTS

Another tip that Barrington had was to look into secured credit cards or “becoming an authorized user on someone else’s card” instead of BNPL.

“Secured credit cards or having someone sign you on as an authorized user of their card can be a way in for people who don’t have good enough credit to qualify for a card on their own,” he said.

Credit requirements can differ from card to card. Americans had FICO Scores of 715 on average last year, according to Experian.

Finance

U.S.-China talks ‘stalled’ and need Trump and Xi to weigh in, Bessent says

Published

4 hours ago

May 29, 2025

Business Finance News

The U.S. and Chinese flags are seen on the day of a bilateral meeting between the U.S. and China, in Geneva, Switzerland, May 10, 2025.

Keystone/eda/martial Trezzini | Via Reuters

BEIJING — U.S.-China trade talks “are a bit stalled,” requiring the two countries’ leaders to speak directly, Treasury Secretary Scott Bessent told Fox News in an interview Thursday local time.

“I believe that we will be having more talks with them in the next few weeks,” he said, adding that there may be a call between the two countries’ leaders “at some point.”

After a rapid escalation in trade tensions last month, Bessent helped the world’s two largest economies reach a breakthrough agreement in Switzerland on May 12. The countries agreed to roll back recent tariff increases of more than 100% for 90 days, or until mid-August. Diplomatic officials from both sides had a call late last week.

Still, the U.S. has pushed ahead with tech restrictions on Beijing, drawing its ire, while China has yet to significantly ease restrictions on rare earths, contrary to Washington’s expectations.

“I think that given the magnitude of the talks, given the complexity, that this is going to require both leaders to weigh in with each other,” Bessent said. “They have a very good relationship and I am confident that the Chinese will come to the table when President [Donald] Trump makes his [preferences] known.”

Trump and China’s President Xi Jinping last spoke in January, just before the U.S. president was sworn in for his second term. While Trump has in recent weeks said he would like to speak with Xi, analysts expect China to agree to that only if there’s certainty there will be no surprises from the U.S. during the call.

China has maintained communication with the U.S. since the agreement in Switzerland, Chinese Ministry of Commerce Spokesperson He Yongqian told reporters at a regular briefing Thursday.

But regarding chip export controls, she said that “China again urges the U.S. to immediately correct its wrong practices … and together safeguard the consensus reached at high-level talks in Geneva.”

That’s according to a CNBC translation of her Mandarin-language remarks.

When asked whether China would suspend rare earths’ export controls announced in early April, He did not respond directly. Restrictions on items that could be used for both military and civilian use reflect international practice, as well as China’s position of “upholding world peace and regional stability,” she said.

This week, the Trump administration also announced it would start revoking visas for Chinese students.

“The U.S. decision to revoke Chinese student visas is fully unjustified,” China’s Foreign Ministry Spokesperson Mao Ning said Thursday, according to an official English transcript. “It uses ideology and national security as pretext.”