The Big Story Buy Now Pay Later: how does it work and is it right for you?
Dec 26, 2025
Kelley Keehn, a personal finance educator and CEO of the Money Wise Institute, dives into the intricacies of Buy Now Pay Later (BNPL) payment options. She explains its rise among younger consumers and the structure of BNPL payments, emphasizing potential risks and fees. Kelley discusses spending habits during the holidays, the psychological factors at play, and the importance of understanding one’s financial personality. She also shares strategies for responsible use of BNPL and introduces insights from her new book on money identity and behavior.
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From Layaway To Instant Ownership
- Kelley Keehn recalls growing up with layaway and contrasts it with modern BNPL instant possession.
- Layaway required full payment before taking items home, while BNPL gives immediate ownership and later payments.
Why BNPL Works For Retailers
- Buy now, pay later (BNPL) mimics old retail tactics but delivers instant possession and smaller visible payments.
- Retailers use BNPL because lower-seeming installments increase purchases and impulse buys.
'No Interest' Can Hide Real Costs
- BNPL often advertises no interest or fees but many users still pay late or incur costs.
- Kelley Keehn notes rapid growth and rising late payments, revealing hidden consumer risk.