Interviewed at NBC Grown (Acorns) about some dangers with new Buy Now Pay Later programs.

Think of BNPL as a loan

Before opting into a BNPL service, there are some questions it’s smart to ask yourself, says Simon Blanchard, a Beyer Family associate professor at the Georgetown University’s McDonough School of Business whose research focuses on consumer psychology and consumer decision-making. “Would you make that purchase independent of how you pay? Would you make this purchase in cash? Do you need this or not?”

In other words, if you had to pay in full at the point of purchase, would you be willing to put down the money? Or would you forget about the product altogether?

For example, Blanchard says, if you need a washer and dryer today, you’ll probably still need those six months from now. Not having the cash upfront will not diminish your need for the product. For smaller purchases, like an expensive dress, though, this might not be the case.

“They don’t look like loans but they are loans,” he says. “Do you have to take out a loan for a pair of shoes you’re buying?”