A guide to using buy now, pay later for travel

Planning a vacation? Buy now, pay later (BNPL) may be offered as a payment option when booking flights, hotels, or other travel accommodations.

What is buy now, pay later for travel?

Buy now, pay later is an installment option that allows people to split up purchases into several smaller payments over weeks or months. It can typically be used for several types of purchases, from big-ticket items like electronics and furniture to travel expenses like hotels and airfares.

If BNPL is an available payment option for an airline, hotel, or travel retailer, individuals can opt for a payment plan at checkout. Normally, they would select the BNPL provider and apply in the checkout, but some providers may redirect applicants to their website to create an account and apply. Typically, applicants receive a near-instant decision, which may mean those looking to use buy now, pay later for travel can book their travel or vacation without a significant delay.

Depending on the BNPL provider, there may be interest fees and other charges, though some providers may offer plans with no interest. Be sure to review any terms before applying.

While application and approval requirements may vary depending on provider, here’s a breakdown of the general eligibility requirements and approval process:

• Meet the eligibility requirements: These can vary based on the provider. People typically need to be at least 18 years old and provide personal details like their social security number and home address. Some BNPL providers may also assess income, payment history, and credit score.
• Agree to the terms: Individuals must agree to the terms and conditions of a BNPL plan, including an installment schedule and any associated fees or interest charges.
• Receive a decision and book travel: People usually receive a BNPL approval decision in seconds. If approved, they can book their travel using BNPL as their payment method.

Potential benefits of using buy now, pay later for travel

Before using buy now, pay later for a trip, consider the potential advantages:

• Flexibility: BNPL may offer flexibility to spread the cost of a trip over time, allowing travelers to manage their budget and avoid a significant upfront expense.
• Interest-free options: Some BNPL services may provide interest-free payment plans. For example, PayPal’s Pay in 4 allows people to split eligible purchases into four interest-free, bi-weekly installments.¹
• Accessibility: Buy now, pay later may help make travel accessible to those with limited credit histories or low credit scores.

Potential downsides of using buy now, pay later for travel

There are some potential disadvantages to using buy now, pay later for travel expenses. Some examples include:

• Interest and fees: Some BNPL providers may charge interest or fees if travelers miss payments or choose longer repayment terms, potentially increasing the overall cost of their trip.
• Overspending: While BNPL offers flexibility, it can also lead to overspending if travelers don't carefully budget for their installment payments. It also may tempt some to book more expensive trips than they can comfortably afford.
• Credit impact: Although certain buy now, pay later providers may not conduct hard credit checks initially, missed payments or defaults may negatively impact credit scores in the long run.
• Limited booking options: Not all travel providers or agencies accept BNPL as a payment option.

Using buy now, pay later for travel responsibly

Here are some factors to consider when signing up for a BNPL plan for travel:

• Budget and plan: Establish a personal budget for travel plans that includes not only the upfront trip cost but also the future installment payments to ensure the overall expense remains manageable and within budget.
• Read the fine print: Carefully read and understand the terms and conditions. Pay close attention to any interest rates, fees for missed payments, and the total cost of a trip when opting for BNPL.
• Responsible spending: Avoid the temptation to overspend just because BNPL offers flexibility. It’s important to only buy on credit responsibly.
• Ensure timely payments: Commit to making payments on schedule to avoid late fees or interest charges. Setting up automatic payments can help prevent missed deadlines.

Using BNPL for travel may offer convenience and flexibility for those looking to travel or book a vacation, but it should be done with careful consideration. Be sure to consider any fees or interest that may apply and keep track of when payments need to be made.

Learn about PayPal Pay Later.