Retailers love installment credit because it directly reduces shopping cart abandonment and aggressively inflates the average basket size. For the consumer, however, the benefits are often a double-edged sword.

AI responses may include mistakes. For financial advice, consult a professional. Learn more Buy Now, Pay Later: A Double-Edged Sword | MNP LTD

: When you look at a $100 jacket, your brain registers a heavy hit to your wallet. When a platform breaks that down into four payments of $25, cognitive resistance plummets.

: Most retail BNPL programs do not report your on-time payments to credit bureaus, meaning you do not build a credit score by using them.

: It can make high-ticket household items or large clothing hauls fit into a rigid monthly budget.

The explosive growth of BNPL platforms isn't an accident. It is meticulously engineered using principles of behavioral finance.