The “What You Need To Know About Buy Now, Pay Later Loans,” DCWP Tipsheet

March 8, 2023

Department of Consumer and Worker Protection (DCWP) Commissioner Vilda Vera Mayuga today released, as part of National Consumer Protection Week.

The “What You Need to Know About Buy Now, Pay Later Loans,” tipsheet, which will soon be available in multiple languages, to help New Yorkers make the best financial decision possible when considering the use of Buy Now, Pay Later loans. Buy Now, Pay Later loans are short-term loans that allow consumers to pay for something in small installments and avoid fees or interest, but only if consumers pay in full and on time.

“Buy Now, Pay Later loans might seem like a safe way to purchase an item you want, but they also come with financial risks, and it can be easy to end up spending more than you budgeted for,” said DCWP Commissioner Vilda Vera Mayuga. “Before entering into a Buy Now, Pay Later loan agreement, make sure you understand the financial risks associated with these short-term loans, and make an appointment at a Financial Empowerment Center to get free, one-on-one professional financial counseling.”

What You Need to Know About Buy Now, Pay Later Loans

  • Read the fine print. Buy Now, Pay Later loans have a wide range of payment periods, fees, and interest rates. Some loans claim to be fee- and interest-free but charge more for late or missed payments. Loans from different companies usually have different payment schedules.
  • Check the return policy. Make sure you understand how refunds, returns, and exchanges work for the specific loan you use. Consumers have reported difficulty trying to return items they bought using a Buy Now, Pay Later loan.
  • Budget before you buy. Make sure you will be able to pay off your loan on time. Your income over the loan period should be able to cover the loan payment plus essentials like housing, food, and transit. If your income varies week to week, it may be better to save the amount you’ll need to buy the item at full price. NYC Financial Empowerment Centers can help you make a budget.
  • Understand how Buy Now, Pay Later loans may impact your credit score. Buy Now, Pay Later companies do not report payments to the major credit bureaus consistently. Late payments often reduce a credit score, and on-time payments may not improve a credit score. If you want to improve your credit score, you may want to consider another type of loan or credit product.
  • Limit the number of Buy Now, Pay Later loans you owe. It can be difficult to manage several loans at the same time because they can have very different payment schedules and loan terms. Avoid having many different Buy Now, Pay Later loans in repayment at the same time. If you need to have multiple loans, use the same company to align payment dates and terms. Make sure you get text and email reminders to help you keep on top of payments.
  • Turn off autopay if you don’t want to be charged automatically. Many Buy Now, Pay Later companies default to automatic payments. If your bank account allows overdrafts, or if you plan to make early payments, automatic payments may not be right for you. You have the legal right to stop automatic payments. If you can’t stop automatic payments, you can send the company and your bank a “revoke authorization” letter. Visit consumerfinance.gov for more information.
  • Get free financial counseling if you need help. NYCFinancial Empowerment Centers offer free one-on-one professional financial counseling in person or by phone. Visit nyc.gov/TalkMoney or call 311 to schedule an appointment.

DCWP’s NYC Financial Empowerment Centers provide free, one-on-one professional financial counseling to help New Yorkers create a budget, establish or improve their credit, set up a spending plan, open a safe and affordable bank account, contact their lenders about debt– including student loans, develop a strategy to reduce debt or lower payments, access emergency government resources, and more.

Anyone 18 and older who lives or works in New York City can book a free and confidential appointment with a professional financial counselor by visiting nyc.gov/TalkMoney or calling 311 and saying “Financial Counseling.” Services are available in person or by phone and in multiple languages.  

NYC Department of Consumer and Worker Protection (DCWP) protects and enhances the daily economic lives of New Yorkers to create thriving communities. DCWP licenses more than 51,000 businesses in more than 40 industries and enforces key consumer protection, licensing, and workplace laws that apply to countless more.


By supporting businesses through equitable enforcement and access to resources and, by helping to resolve complaints, DCWP protects the marketplace from predatory practices and strives to create a culture of compliance.

Through its community outreach and the work of its offices of Financial Empowerment and Labor Policy & Standards, DCWP empowers consumers and working families by providing the tools and resources they need to be educated consumers and to achieve financial health and work-life balance.

DCWP also conducts research and advocates for public policy that furthers its work to support New York City’s communities.

For more information about DCWP and its work, call 311 or visit DCWP at nyc.gov/dcwp or on its social media sites, TwitterFacebookInstagram, and YouTube.


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