Buy Now, Regret Later? Decoding BNPL and Layaway Payment Plans

NerdWallet's Smart Money Podcast

NerdWallet Personal Finance

Business, Education, Investing, How To

4.2 • 665 Ratings

🗓️ 11 December 2024

⏱️ 15 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Learn the pros and cons of layaway and Buy Now, Pay Later (BNPL) and how to choose the best option for holiday shopping. What is the difference between layaway and Buy Now, Pay Later (BNPL)? Which payment option is better for holiday shopping? Hosts Sean Pyles and Anna Helhoski discuss these two financing tools, how they work, and which might be the smarter choice for holiday shopping. Lauren Schwahn, a writer at NerdWallet who covers credit, debt, budgeting and money, joins Sean and Anna to break down the basics of layaway and BNPL, highlighting differences in payment timing, access to purchased items, and impact on credit. They also discuss when you’ll receive your item, the repayment timelines, potential fees for missed payments. why BNPL appeals to Gen Z, and how either option can fit into a shopper’s financial strategy. Plus: tips for avoiding pitfalls with BNPL, such as setting payment reminders and avoiding multiple loans. Then, Sean and Anna break down this week’s money headlines, including the latest jobs report, the CFPB’s crackdown on illegal junk fees, and the rise of market timing among investors. There are a lot of ways to invest money — high-yield savings accounts, CDs, bonds, funds and stocks are all options. To learn more, read NerdWallet's writeup on the best ways to invest money right now: https://www.nerdwallet.com/article/investing/the-best-investments-right-now In their conversation, the Nerds discuss: buy now pay later, BNPL pros and cons, layaway vs BNPL, holiday shopping tips, budget-friendly shopping, buy now pay later risks, layaway payment plans, how BNPL works, shopping on a budget, avoiding holiday debt, payment plan comparison, layaway benefits, BNPL for Gen Z, holiday financing tips, budgeting for big purchases, holiday shopping savings, credit impact of BNPL, layaway financing, BNPL fees, installment payment plans, choosing BNPL or layaway, holiday gift financing, Klarna, Afterpay guide, Affirm payment plans, layaway history, BNPL for beginners, managing BNPL loans, credit card vs BNPL, smart financing options, how to use layaway, BNPL payment reminders, financing options for gifts, and understanding BNPL terms. To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [email protected]. Like what you hear? Please leave us a review and tell a friend. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Ready to launch your business? Get started with the commerce platform made for entrepreneurs.
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0:12.4	Marketing tools that get your products out there. Integrated shipping solutions that actually save you time.
0:17.4	From startups to scaleups, online, in person and on the go Shopify is made for
0:22.8	entrepreneurs like you sign up for your one dollar a month trial at Shopify.com
0:27.7	slash setup.
0:32.6	Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles.
0:39.7	And I'm On the Hill Hoski.
0:41.3	And this is our weekly Money News Roundup, where we break down the latest in the world of finance to help you be smarter with your money.
0:47.3	We'll go deep into a single topic than leave you with the latest money headlines.
0:51.6	The holiday shopping season is well underway, but we have a feeling
0:55.1	there are a few stragglers out there. Guilty. Me too. So today we're talking about the tools
1:01.5	shoppers afford to make big purchases and the potential risks involved. We'll be diving into
1:07.1	two ways that shoppers break up the cost of one big purchase into multiple smaller payments.
1:13.2	The old school way is called layaway, and it's been around since the Great Depression.
1:18.0	The new school way is called Buy Now Pay Later or BNPL, and it's a rapidly rising online payment
1:24.3	method that's gaining popularity among Gen Z. Adobe Analytics expects shoppers during
1:29.0	this holiday season to spend roughly 11% more using BNPL than they did a year ago.
1:35.0	Here to walk us through both payment options is Lauren Schwann, a writer at NerdWallet who covers
1:39.3	credit, debt, budgeting, and money. Lauren, thanks for being here today. No problem.
1:44.7	Let's hit the basics first.
1:46.0	What is layaway and what is BNPL?
	...

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