“Buy now, pay later”: the debt that doesn't look like debt
At checkout, between the "pay everything now" button and the "pay in 3 interest-free installments" button, almost nobody chooses the first. Not because the second is cheaper, which it almost never is, but because it hurts less.
Pay-later services, known as Buy Now, Pay Later (BNPL), have become the default option in thousands of online stores. They are so built into the purchase process that almost nobody perceives them for what they are: a short-term loan.
Two widespread false ideas
"If it doesn't charge interest, it isn't a loan." False. It is still a commitment to pay in the future with real consequences if you fail. The cost hasn't disappeared: it is in the commission the store pays, in the price or in the penalty if you fall behind.
"Splitting the payment is more responsible than paying all at once." Not that either. Fragmenting the payment doesn't change what you spend. It changes how you perceive it, and that reduced perception is precisely what leads you to buy more.
How whoever offers you installments makes money
If the service doesn't charge you interest, where does it get its profit? From two places:
- From the store. The service charges the merchant a commission on every sale it helps close. That is why so many stores offer it: with this option, the average purchase amount goes up and fewer carts are abandoned.
- From whoever falls behind. If you don't pay an installment on time, surcharges or interest follow.
In both scenarios, the service wins. The risk always stays on your side.
The real danger: debt split into small pieces
A single deferred payment is rarely a problem. The problem is piling up several without realizing it.
With a traditional credit card, at least you see a single statement with everything you owe. With pay-later, your commitments live scattered across several apps, each with its own collection calendar. None shows you the total sum.
Elena, one of the main characters in The Price of Not Knowing, discovers it in a month when she invoices little: she has four deferred payments active at once (a pair of sneakers, an online course, a gift and a laptop repair), each in a different app. None seemed worrying on its own. Together, they ate up an important part of what she expected to earn that month, just when two clients were late paying her.
The rule for deciding
Before pressing "pay in installments", ask yourself a single question:
Would I buy it anyway if I had to pay for all of it today?
If the answer is no, that "no" is real information about whether you can afford it right now.
Does this mean pay-later is always bad? No. For a purchase you had already decided on and that fits comfortably in your budget, deferring it interest-free doesn't change the cost and can help you fit it into the month better. The problem is not the mechanism, but that it deliberately removes the brake that normally makes you hesitate before spending.
What changes with the new European directive
Directive (EU) 2023/2225 on consumer credit, which European Union countries must apply from November 20, 2026, expressly includes "buy now, pay later" services, which until now were largely outside the regulation. That means more information obligations and creditworthiness assessments for whoever offers the credit. How it takes shape in each country depends on its own transposition law, so it is worth following how it is applied in Spain.
More regulation helps, but it doesn't replace your judgment: no rule is going to add up for you all the installments you have open.
Your Action Protocol (24 hours)
- Take inventory. Check your email and your apps and write down all the deferred payments you have active, including the "pay in 3" option on your own card. Add them up.
- Count them as debt. Add that sum to your monthly debts, even if the installments last only a few weeks.
- Apply the question to your next online purchase.
If you have irregular income, do as Elena does: keep a single list with all your pay-later commitments and update it every time you accept a new one.
More in the book
The Price of Not Knowing devotes an entire part to spotting scams and financial traps: the psychology of FOMO, the fallacy of easy money, cryptocurrencies and the anatomy of a scam, step by step. Before all that, it is worth having a safety net: how to calculate your emergency fund.
This article is for informational purposes and does not constitute personalized financial advice.
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