How to ditch ‘buy now, pay later’ debt

Given how ubiquitous it is, buy now, pay later (BNPL) may seem more innocuous compared to other types of debt. After all, all you often have to do at the checkout screen is click to split your payment into multiple installments, often without interest.

But at the end of the day, BNPL is debt just the same as any other debt — and it can majorly weigh down your financial situation if it starts to pile up. This is especially true given recent changes that mean BNPL will soon affect your credit score.

Yet increasingly, BNPL users are reportedly paying late. "More than half of BNPL users (54%) say they've paid late on a BNPL loan in the past, including 41% who paid late on one in the past year," said LendingTree in a recent survey. If that is your situation, here are some ways you can wave goodbye to your BNPL debt — before it affects your credit.

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Try the debt snowball or avalanche approach

Having a plan in place can make all the difference between repaying your BNPL debt on time and not. “Without a plan, it can be easy to forget, and suddenly a convenient payment option can generate fees and interest,” particularly since “buy now, pay later payments may not be due on the monthly or 30-day cadence you are accustomed to,” said Experian.

Two common DIY options that can help with debt payoff — especially if you have more than one BNPL loan or other debts that you are paying down — include the debt snowball method and the debt avalanche method. With the snowball method, you focus on “paying off the smallest balances first” to build “momentum,” whereas with the avalanche method, you address the “highest-risk accounts first,” said CBS News. For BNPL debts, this may mean the account with the highest fees or interest rate, if applicable.

Consider debt consolidation

One of the “easiest ways to get rid of your BNPL debt is to roll multiple accounts into one low-rate personal loan,” said CBS News. Those with multiple BNPL loans may uniquely benefit from this option, as it rolls your debts into just one personal loan, with a single payment due date to keep track of.

That said, “getting a personal loan can be relatively more challenging — and might be especially difficult for some BNPL borrowers who haven't yet gotten ‘credit’ for positive payment histories,” said Bankrate.

Look into the possibility of debt forgiveness

While more of a last resort option, “buy now, pay later debts can potentially be included in a debt forgiveness program,” said CBS News. It is possible that “providers, particularly those offering longer-term installment loans through banks or finance partners, may participate in settlement negotiations if an account has become seriously delinquent,” though “others, like retailers managing their own buy now, pay later programs, might not negotiate at all.”

There are important caveats to note with this option. For one, you will likely have to work with a debt relief company, which usually requires having a certain amount of debt that “individual buy now, pay later debts rarely reach” on their own, said CBS News. You will also have to pay the company a certain percentage of the debt that gets settled.