Buy now, pay later by credit card: how does it work in the US?

Learn how Buy Now, Pay Later with credit cards works in the US. Understand benefits, risks, and how to choose the best payment plan.

Complete guide to buy now, pay later with credit card

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“Buy Now, Pay Later” (BNPL) has become a strong trend in global retail. In the United States, this payment option has rapidly grown with companies like Affirm, Klarna, and Afterpay.

However, it’s now also being integrated directly into credit card services offered by major banks and fintechs. This means consumers can now enjoy installment payments using their existing credit cards, without having to sign up for third-party platforms.

But how does it work in practice? What are the benefits, the risks, and how does it compare to traditional BNPL platforms? Let’s break it down.

What is Buy Now, Pay Later with a credit card?

Traditionally, BNPL is a payment method that allows consumers to purchase a product or service and split the cost into multiple payments, with or without interest, usually at the time of checkout. ,

This is done through specific platforms integrated into online or physical stores.

In the BNPL by credit card model, things work a bit differently. The consumer makes the purchase using their credit card as usual, and later chooses to split that transaction into fixed monthly payments through a program offered by the card issuer.

Some of the most well-known programs include Citi Flex Pay, Amex Plan It, and Chase’s My Chase Plan.

How does it work in practice?

First, you make a regular purchase with your credit card, either online or in-store.

After the transaction, your card issuer may send you a notification through the app, email, or SMS, offering you the option to convert that purchase into fixed monthly payments.

In some cases, you can also log into your bank’s app or website and choose which transactions you’d like to split.

Once you select the installment option, you’ll be presented with several plans, each with different payment periods and monthly amounts.

Some may involve a fixed fee instead of interest. After confirming, the original purchase amount is converted into a payment plan and is removed from your main balance.

Which credit cards offer this option?

In the US, many credit card issuers have already implemented this feature. American Express offers “Plan It,” which allows cardholders to split purchases into monthly payments with a fixed fee instead of interest.

Citi’s “Flex Pay” allows installment plans for qualifying purchases above a certain amount. Chase’s “My Chase Plan” lets users select which transactions to split and offers fixed monthly fees.

The Apple Card also offers monthly installments for Apple products with no interest, allowing payments over 6, 12, or even 24 months.

What are the advantages?

One key advantage is predictability. You know exactly how much you’ll pay each month, making it easier to budget.

Some plans offer zero interest, especially during promotional periods, and that can make expensive purchases more manageable.

It’s also a convenient way to pay for large items over time without applying for a personal loan. In some cases, the installment amount is separated from your revolving credit limit, which helps preserve your available credit.

What are the risks and downsides?

While some plans don’t charge interest, they may include fixed fees that increase the overall cost of the item. These fees might not seem high at first, but they can add up if you frequently use installment options.

Also, monthly payments can reduce your future cash flow and increase your debt load. If you already have several active plans, it can be easy to lose track of how much you owe.

Additionally, not all purchases qualify for these plans, there may be minimum amounts or limitations on where and how the purchase was made.

How is it different from traditional installment plans?

In countries like Brazil, it’s common to choose installment payments at the moment of purchase, and the total cost is already broken into monthly charges.

In contrast, BNPL by credit card in the US allows you to make a regular purchase first, then decide afterward if and how you want to split it into payments.

Also, traditional credit card financing often involves high interest rates, while BNPL plans from card issuers typically offer more transparent and lower-cost terms.

Buy Now, Pay Later through your credit card is a growing option for US consumers. It brings together the flexibility of installment payments with the convenience of your regular card, giving you more control, as long as you stay organized and financially aware.

Before using it, make sure to review your budget and ask yourself: will I be able to afford this payment every month, for the next few months? If the answer is yes, BNPL could be a smart tool to support your spending and planning.