The old-fashioned layaway plan in which a buyer makes periodic payments on anything from sofas to bridal gowns has been revived digitally in buy-now-pay-later — or B.N.P.L. — financing.
More than half of all Americans now use B.N.P.L., with users skewing toward millennial and Gen Z shoppers, according to a survey by the strategic marketing firm PartnerCentric.com.
As a means to fund a relatively hefty investment, B.N.P.L.s are on the rise in travel. A 2024 study by Phocuswright, a travel market research, news and events company, found that nearly 40 percent of all travel companies surveyed had adopted installment-payment options. In its 2025 summer travel report, the personal finance website NerdWallet found nearly one in five respondents planned to use B.N.P.L. plans to pay for travel.
But a cruise isn’t a refrigerator. Travel is subject to variables like weather and other circumstances that might force cancellations, rebookings or delays, making the use of B.N.P.L. and related financial products a case for greater scrutiny.
Here’s what travelers need to know about B.N.P.L.
Interest-Free Financing
Traditional B.N.P.L. plans offered by financial companies such as Affirm, Afterpay and Klarna divide a sale price into four interest-free installments, usually over six- to eight-week time frames. Platforms usually require users to set up repayment plans, such as regular bank debits. With travel purchases like airline tickets, the loans usually do not have to be paid off before travel.
When all goes according to plan, B.N.P.L.s offer consumers a means to budget responsibly at no cost. But in a survey by the financial website LendingTree, more than 40 percent of users of B.N.P.L. plans said they paid late at least once in the previous year, which is how fees can creep in.
Afterpay’s penalties for loans above $40 start at $10 per missed payment and are capped at $68. Affirm doesn’t apply late fees, but partial or late payments may hurt your credit score and your ability to use the platform again. Klarna has a late payment fee of up to $7, which is much lower than credit card late payment fees, which can run $30 or more a month and accrue interest.
The Credit Card Comparison
Credit cards can be harder to get, and many charge an annual fee. If you pay your balance in full every month, you do not accrue interest, but if you don’t, you can rack up expensive interest charges.
In contrast to loans, they offer travelers many protections such as car rental insurance and reimbursements for lodging or food if your flight is significantly delayed. The specific benefits vary by card, with more expensive ones offering more benefits, but even entry-level credit cards like the Chase Freedom Rise, which charges no annual fee, offer travel insurance up to $1,500 a person.
“With travel, when you use a credit card, you are protected,” said Julie Beckham, an assistant vice president and the financial education development and strategy officer with Rockland Trust, a commercial bank based in Rockland, Mass., who has analyzed B.N.P.L. plans in her podcast.
“Break anything into four and it’s more affordable, but life happens and people forget and fees add up and you have very little recourse,” she added.
Many credit cards also offer rewards or loyalty points linked to sales; most standard B.N.P.L. plans do not.
Point-of-Sale Loans
Many platforms, including Affirm, Afterpay and Klarna, also offer extended terms that are more akin to those of traditional loans.
Such products often call themselves pay-later plans, but they function differently, including charging interest from the start of the loan, according to Ed deHaan, the MBA Class of 1963 professor of management at the Stanford Graduate School of Business in California.
“This is a buyer-beware moment,” Mr. deHaan said, noting that the terms are “actually worse than a credit card because most credit cards don’t accrue interest until after 30 days.”
Just what interest rate a user may be charged usually depends on a “soft credit check,” an evaluation that does not affect your credit score. Interest rates vary widely — generally running from zero to 36 percent — based on your credit profile and the size and length of the loan.
What users love about pay-later plans — the easy and quick access to financing — critics flag as encouraging reckless spending.
“Such options prey on impulsiveness, a preference for immediate gratification and overconsumption to the detriment of a good long-term financial plan,” wrote Alexander Smith, associate professor of economics at Worcester Polytechnic Institute in Worcester, Mass., in an email.
Travel Specialists
In addition to operators like Klarna, travelers will find funding offers from travel-focused firms such as Flex Pay and Paylater Travel.
Paylater Travel allows travelers to lock in a price and book a flight they see today for future air travel. They must pay off the entire amount before flying. The company bills it as “pay as you save” and offers interest-free installments for up to 26 weeks after an initial deposit as low as 5 percent of the fare.
A broad range of travel providers, including United Airlines, Carnival Cruise Line, Wyndham Hotels & Resorts and Universal Destinations & Experiences, team up with Flex Pay, which offers loan financing ranging from zero to 36 percent interest.
For example, a $1,000 trip amortized at 15 percent interest over six months would total $1,044.20. Flex Pay does not impose late fees.
Some of its partners, including Vail Resorts, offer interest-free payment plans, meaning skiers can buy Vail’s Epic Pass and make payments over three-, six- or nine-month terms without paying more than the face value of the pass. An Epic Pass currently priced at $1,097 would cost $122 a month over nine months.
Additionally, users don’t need to pay off the loan before taking the trip, meaning an emergency flight can be booked today, taken tomorrow and paid off over three to 24 months.
In the case of hotels, a Flex Pay plan would begin at check-in (unless you booked a prepaid rate, which would begin at the time of booking).
“We’re opening the aperture, allowing more people to travel,” said Tom Botts, the president of Flex Pay.
‘Things Go Bump in the Night’
Most travel companies still extend loyalty points to enrolled members regardless of how they paid. The greater risk for travelers using loan financing is when travel plans are disrupted by circumstances such as weather delays or a change in finances that require canceling a trip.
If you cancel a flight through Paylater Travel, the company charges a fee of 10 percent of your total booking, capped at $150 a person, in addition to whatever fees the airline charges.
In an emailed statement to The Times, the company called unpaid bookings “rare” and said, “If a payment plan isn’t completed, we work with the traveler to find a solution, whether that’s offering travel credit for a future booking, rebooking their trip for a future date or helping them plan a trip that better fits their budget.”
In the case of an airline ticket booked with Flex Pay, if you canceled a flight and received a credit with the airline, you would still be required to pay off Flex Pay but would keep the value of the credit with the airline. If you had a refundable airfare, the airline would refund that amount back to your loan.
“In travel, things go bump in the night and we understand that,” said Mr. Botts.
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