• Consumers facing high costs may be tempted by buy now, pay later (BNPL) and deferred-interest credit card offers
• Advocates say both products can mask significant fees and steep retroactive interest charges
• Experts urge shoppers to proceed cautiously and avoid promotions that seem “too good to be true”
As the holiday shopping season ramps up during what advocates call an ongoing affordability crisis, consumer experts are urging shoppers to think twice before accepting promotions that promise painless financing. The National Consumer Law Center (NCLC) warns that both buy now, pay later (BNPL) plans and so-called “no interest” credit card promotions can trap people in costly debt at a time when household obligations are already at historic highs.
“Buy now, pay later loans can make unaffordable purchases look cheaper than they are, and zero-interest credit card promotions can be a risky hidden time bomb,” said Lauren Saunders, associate director at NCLC, in a news release.
Despite their appeal, these products often come with fine-print pitfalls — and, according to the group, a weakened regulatory environment is leaving consumers more exposed than in past years. With the Consumer Financial Protection Bureau (CFPB) pulling back from aggressive oversight, advocates say it’s more important than ever for shoppers to protect themselves.
BNPL loans can mask high fees and repayment issues
BNPL services are marketed as an interest-free way to stretch out payments, but NCLC warns that lenders often charge late fees, bounced-payment fees and other add-ons that can quickly raise the true cost of a purchase. Consumers have also reported trouble cancelling BNPL loans when orders are returned or cancelled — a problem that has left some paying off financing for items they never kept.
Managing several BNPL plans at once can be equally hazardous. With different due dates across multiple providers, shoppers may inadvertently trigger overdraft or nonsufficient-fund fees, compounding their financial strain.
Deferred-interest credit cards can deliver steep retroactive charges
Deferred-interest credit card promotions may be even more dangerous. Ads commonly promise “no interest for 12 months” or “0% until 2026,” but the catch is buried deep: if the entire balance isn’t paid off before the promotional period ends, the lender retroactively charges interest on the full purchase amount — going all the way back to the original transaction date.
NCLC offers a stark example: a shopper who buys a $2,500 laptop under a one-year deferred-interest plan at 31% APR and pays down everything except $100 by the deadline would still be hit with roughly $430 in back-dated interest on the entire purchase.
“Don’t let deceptive financial promotions with huge, delayed charges ruin your holidays,” said NCLC senior attorney Chi Chi Wu. “If an offer looks too good to be true, it probably is. Don’t let predatory lenders put you on the hook for this year’s holiday spending into next year and beyond.”
Tips for safer holiday financing
For shoppers considering BNPL:
Consider skipping purchases you cannot pay off immediately
Review all fees and be cautious about BNPL-linked subscriptions
Track payment dates closely and avoid juggling multiple BNPL plans
Monitor total BNPL debt and know your right to cancel automatic payments
For those weighing “interest-free” credit card deals:
Avoid deferred-interest promotions altogether
Don’t stack multiple deferred-interest purchases on one account
Pay more than the minimum payment each month to reduce risk