Klarna, Afterpay, and Affirm all follow the same idea - buy what you want now and pay for it over time. The payment options are enticing because at first glance they don't appear to have extra costs and some don't require a credit check, but they could cost you in the long run.
"You always want to be sure you understand the interest rates and the fees because often they're folded into that quarterly payment," said Kimberly Palmer with Nerdwallet.
For example, Affirm has different interest rates depending on where you shop, but there are no late fees. While Klarna and Afterpay have no interest but will charge late fees if you miss a payment.
"Then it actually can really just grow just like as with credit card debt," said Palmer.
So why are services like these growing in popularity and who should really be considering using one?
Palmer says if you're new to credit, it could be a good option. These services are more lenient on who they approve and may report on-time payments to creditors.
It also allows for a big, one-time purchase like a mattress or piece of furniture to be made, especially if you don't have a credit card and want fixed payments.
"In general, it's best to save up ahead of time and have the cash on hand to make purchases. But as we all know, that's just not always possible," said Palmer.
She says making a decision could come down to interest. Affirm rates can be as high as 30%. Palmer says in that case, a personal loan through your bank could be a better option or finding a new credit card that offers zero percent APR at sign up.
No matter the case, read the fine print so you will know if there will be any extra fees.
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