The holiday season is here, and with it comes the pressure to find perfect gifts for everyone on your list. As you browse online stores this year, you’ve probably noticed a tempting option at checkout: “Buy now, pay later.” These services promise to let you spread the cost of Christmas shopping over several weeks or months with no interest. Sounds perfect, right? Before you click that button, let’s talk about what you’re really signing up for.
What Exactly Is Buy Now, Pay Later?
Buy now, pay later (BNPL) services like Affirm, Klarna and Afterpay have exploded in popularity over the past few years. The concept is simple: instead of paying the full price upfront, you split your purchase into smaller installments—typically four payments over six weeks. The first payment is usually due at checkout, with the remaining payments automatically charged to your debit or credit card every two weeks.
Unlike traditional credit cards, most BNPL services don’t charge interest if you pay on time. They make their money by charging merchants a fee for each transaction, which is why retailers are so eager to offer these options at checkout.
The Appeal During the Holiday Rush
It’s easy to see why buy-Christmas-presents-now-pay-later options are so attractive. You can grab that $200 gift today and only pay $50 upfront. The math feels manageable, and you get the satisfaction of checking someone off your list without the immediate financial sting.
According to the Consumer Financial Protection Bureau, BNPL usage surged during recent holiday seasons, with many shoppers using these services specifically for gift purchases. The appeal is obvious when you’re trying to spread holiday cheer without draining your checking account.
The Hidden Dangers of Buy Now, Pay Later
Here’s where things get tricky. While BNPL services market themselves as interest-free and consumer-friendly, they come with real risks that can turn your holiday joy into January stress.
Late Fees Add Up Fast
Miss a payment by even one day, and you’ll typically face a late fee, often ranging from $7 to $10 per transaction. If you’ve used BNPL for multiple gifts, those fees can snowball quickly. Financial experts warn that these late fees can effectively create an interest rate that rivals or exceeds credit card APRs.
It’s Too Easy to Overspend
The biggest danger? BNPL makes it incredibly easy to lose track of what you’re actually spending. When you’re not handing over the full amount upfront, your brain doesn’t register the purchase the same way. You might use buy now, pay later Christmas presents services for five different gifts, thinking you can handle $25 payments. But suddenly you’re juggling multiple payment schedules, and that’s $125 going out of your account every two weeks — right when you’re also paying for holiday travel, meals and other holiday expenses.
Credit Score Impact
While most BNPL services don’t report on-time payments to credit bureaus (so you don’t build credit), they may report missed payments. Some services also perform hard credit checks, which can temporarily lower your credit score. The impact on your credit profile isn’t always apparent until it’s too late.
No Purchase Protection
Unlike credit cards, BNPL services typically offer minimal consumer protection. If a gift arrives broken or never shows up, resolving disputes can be more complicated than with traditional payment methods.
A Smarter Alternative: Plan Ahead with Community Point Bank
Here’s the truth: the best way to handle holiday shopping is to plan for it before the season arrives. That’s where Community Point Bank’s Christmas Club Savings account comes in.
A Christmas Club account works like a dedicated piggy bank for the holidays. You set aside a manageable amount each month throughout the year, and when November rolls around, you’ve got a gift fund ready to go — no payments, no fees, no stress. Even setting aside $50 a month gives you $600 for holiday shopping by December.
The beauty of saving versus borrowing is simple: you’re spending money you already have instead of money you hope to have later. Life is unpredictable. Your car might need repairs in January, or you might face unexpected medical bills. When you’ve already committed to BNPL payments, you have no flexibility.
Making the Right Choice This Season
If you’re reading this in November 2025 and haven’t saved for the holidays, don’t panic. You still have options that don’t involve buy now, pay later services:
- Set a realistic budget. It’s better to give thoughtful, modest gifts this year and start saving now for next year. Your loved ones would rather you be financially secure than stressed about debt.
- Open a Christmas Club account today. Yes, it’s late for this year, but you can start building your 2026 holiday fund immediately at Community Point Bank. Future you will be incredibly grateful.
- Consider traditional credit wisely. If you must use credit, a low-interest credit card often provides better consumer protections and more predictable terms than BNPL services. Just make sure you have a clear repayment plan.
Frequently Asked Questions About Buy Now, Pay Later
Does buy now, pay later affect my credit score?
It depends on the service. Some BNPL providers perform soft credit checks that don’t impact your score, while others do hard inquiries that can temporarily lower it. Most don’t report on-time payments to help build credit, but they may report missed payments that can hurt your score.
What happens if I miss a buy now, pay later payment?
You’ll typically be charged a late fee of $7 to $10 per missed payment. Your account may be frozen until you’re current, and repeated missed payments could be reported to credit bureaus. Some services may also charge additional fees or refuse future transactions.
Is buy now, pay later better than using a credit card?
Not necessarily. While BNPL doesn’t charge interest on standard plans, credit cards offer stronger consumer protections, dispute resolution processes, and potential rewards. Credit cards also help you build credit when used responsibly, while most BNPL services don’t report positive payment history.
Can I use multiple buy now, pay later services at once?
Yes, but this is where people get into trouble. Using several BNPL services simultaneously makes it easy to lose track of payment schedules and overspend beyond your budget. The payments can pile up quickly and strain your finances.
Are there any advantages to buy now, pay later over credit cards?
BNPL services can be useful if you don’t qualify for a credit card or want to avoid interest charges on a specific purchase. The payment structure is also simpler and more transparent than revolving credit. However, the lack of consumer protections and the ease of overspending often outweigh these benefits.
What’s the best way to avoid holiday debt altogether?
Start saving early with a dedicated holiday fund like a Christmas Club Savings account. By setting aside even small amounts throughout the year, you’ll have cash ready when the holidays arrive — no payments, no interest, no stress. This approach gives you complete control over your holiday spending.
The Bottom Line
Buy now, pay later services aren’t necessarily evil, but they’re not the financial favor they appear to be. They’re designed to encourage spending, not to protect your financial well-being. The “convenience” they offer often comes at the cost of overspending, multiple payment schedules to keep track of, and unexpected fees.
At Community Point Bank, we believe the best financial decisions are the ones that help you sleep soundly at night. That means spending within your means, planning ahead, and building savings that give you real freedom during the holidays and beyond.
This season, give yourself the gift of financial peace of mind. Skip the buy now, pay later trap, and start building a Christmas fund that actually works for you. Your January self will thank you.