Should You Use Buy Now, Pay Later Options to Finance Your Vacation?
Many travel companies are letting users pay in installments. But is "buy now, pay later" a smart financial decision?
Everybody (rightfully) looks forward to booking a vacation, especially in the dreary days of winter. But the ever-present issue with travel is that, well, it costs a lot of money. Between picking out flights, shelling out for hotels and selecting special destination experiences, the vacation tab starts out high and only continues to climb.
That's where the new "buy now, pay later" options have been coming in handy for many travelers. But does it make sense to use buy now, pay later as a way to afford your vacation?
While there are certainly upsides, there is a lot you need to consider before you press "yes" on "BNPL."
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
What is buy now, pay later?
Buy now, pay later programs are exactly what they sound like: They give you the option of buying something – whether it’s a clothing item, a piece of furniture, or yes, even a flight — without handing over the full price at this exact moment. Instead, you opt into a payment plan, which may require you to pay in four biweekly installments, pay monthly over a set period of time, or pay the full price at a specific selected date in the future, among other options.
Popular services like Klarna, Afterpay, Flex Pay and Affirm are dedicated to this method and pop up on most websites as a payment choice, and even PayPal has started offering buy now, pay later options come checkout time.
The pros of using buy now, pay later to finance your vacation
The obvious benefit of using BNPL is that you can essentially purchase what you want, even if you don't have the funds for it right now. This can be particularly enticing for travel.
Airfare can rise dramatically, hotels run out of rooms and experiences are booked up as your departure date approaches. Plus, there may be a sale or a special vacation package being offered you need to take advantage of now. You may also be on a saving schedule where you'll have the budget ready to spend on the trip – at the time of the trip itself, not months before it starts.
Another benefit? Unlike credit cards, most (but not all) BNPL services are zero-interest, provided you make on-time payments, of course. Otherwise, most of them will start charging interest on your missed payments.
The cons of using buy now, pay later
Although it's easy to see why BNPL makes sense at first glance, the reality is it's usually not a smart financial decision, especially when it comes to vacations. After all, while we wish vacations were a necessity, the reality is that they're not.
If you can’t pay for it now, it's simply not a wise move to book a trip: You're essentially just kicking the can down the road, accumulating more and more debt that you can't say for sure you'll pay off on time.
In fact, Brady Wright, a Certified Financial Planner with Golden Road Advisors, strongly warns against using BNPL for any purpose, citing the hidden potential fees associated with this kind of service and describing it as "the latest iteration of the same psychological trick credit card companies have been using for decades: 'Get what you want now, worry about it later.'"
"Retailers partner with BNPL companies because they can show you a price tag that's 75% smaller upfront while dangling phrases like 'interest-free' in front of you — and that gets consumers to spend significantly more," he explained.
It's not just about you buying more than you were planning on, either, he warned. It's also about making a profit off any potential lapses on your part.
"BNPL companies are banking on the fact that a percentage of users will miss payments, at which point they can charge substantial fees or interest rates. Miss a payment, and you're hit with compounding interest that can quickly spiral," Wright said.
So, should you use buy now, pay later for your vacation?
While there are situations where it may make financial sense to set up a Klarna plan for a trip (where you know for sure you're going to pay it off the following week and want to take advantage of a travel deal, for example), those occurrences are rare.
In general, if you need to depend on a BNPL plan to book a vacation, it's probably not a good idea to go now. While it may seem like a temporary godsend, these plans add up quickly and can plunge you into a vicious cycle, especially if you miss a payment and the service decides to charge you interest on your remaining balance. We all deserve a vacation, but no amount of relaxing on a trip makes up for the eventual stress that future financial issues will bring you.
"Whether it's credit cards or BNPL, you need to recognize that both forms of debt allow others to profit at the expense of your ability to build wealth and achieve your long-term financial goals," Wright emphasized.
And keep an eye out if your child mentions using BNPL to go on vacation with you or if they're planning a trip on their own: BNPL purchases are the reason behind 28% of total unsecured consumer debt for borrowers aged 18 to 24, according to the Consumer Finance Bureau. Make sure to warn them of the dangers these kind of services pose to their overall financial well-being, and explain what you both need to do in order to have a successful trip:
Work on slowly setting aside money for your travels. Use this Bankrate tool to find the quickest ways to achieve this:
Next, draw up a budget and timeline if needed so you're able to afford it when it comes time to book. Your trip will be happier and more relaxing if it's already paid off by the time you arrive at your destination.
Related content
-
Trump Reshapes Foreign PolicyThe Kiplinger Letter The President starts the new year by putting allies and adversaries on notice.
-
How to Plan a (Successful) Family ReunionFrom shaping the guest list to building the budget, here's how to design a successful and memorable family reunion.
-
These Unloved Energy Stocks Are a BargainCleaned-up balance sheets and generous dividends make these dirt-cheap energy shares worth a look.
-
How to Plan a (Successful) Family Reunion
From shaping the guest list to building the budget, here's how to design a successful and memorable family reunion.
-
Does Your Car Insurer Need to Know All Your Kids? Michigan Cases Raise QuestionWho you list on your policy matters more than most drivers realize, especially when it comes to who lives in your home.
-
Is Direct Primary Care Right for Your Health Needs?With the direct primary care model, you pay a membership fee for more personalized medical services.
-
Smart Ways to Share a Credit CardAdding an authorized user has its benefits, but make sure you set the ground rules.
-
Consider These 4 Tweaks to Your 2026 Financial Plan, Courtesy of a Financial PlannerThere's never a bad time to make or review a financial plan. But recent changes to the financial landscape might make it especially important to do so now.
-
We Know You Hate Your Insurance, But Here's Why You Should Show It Some LoveSure, it's pricey, the policies are confusing, and the claims process is slow, but insurance is essentially the friend who shows up during life's worst moments.
-
6 Financially Savvy Power Moves for Women in 2026 (Prepare to Be in Charge!)Don't let the day-to-day get in the way of long-term financial planning. Here's how to get organized — including a reminder to dream big about your future.
-
Countries That Will Pay You to Move: Cash Grants, Incentives and What to KnowExplore real relocation incentives — from cash grants and tax breaks to startup funding — that make moving abroad or to smaller towns more affordable and rewarding.
