Aug 26, 2025
Over the past few years, buy now, pay later (BNPL) services have quietly taken over online checkout screens. A recent Global News report reveals that in Canada, the BNPL market is expected to grow 12% annually, reaching about US$7.5 billion by year’s end. It’s a figure that demands attention, especially as experts warn that BNPL may be pushing more Canadians into financial trouble.
The low-cost trap that isn’t always what it seems
Stacy Yanchuk Oleksy, CEO of Edmonton-based credit counselling agency Money Matters, describes her growing unease. “I have noticed that it’s on every single retail website, and if one is not disciplined, I can see how it’s so easy for people to agree to buy now, pay later because the payments look so low,” she told the news outlet.
Buy now, pay later may feel like a lifeline, especially when $5 or $10 monthly payments are offered. But as Oleksy cautions, “people lose track of what they’ve committed to.” Kelly Ho, a certified financial planner in Vancouver, echoes the risk for consumers managing multiple BNPL plans. "Our mortgages are the original ‘buy now, pay later,’ and it seems like companies have found a way to capitalize on that concept."
Advertisement
If you’re juggling 15 or 20 installments across different platforms, even the most organized spreadsheet can fail you.
Must Read
- Stop the leak: 5 costs Canadians (still) overpay for every single month. How many are sabotaging your 2026 budget?
- What's your worth? Here are the 3 net worth milestones that change everything for Canadians (and what they say about you)
- Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich — and that ‘anyone’ can do it
When BNPL can help and when it hurts
BNPL programs can be a double-edged sword. On the one hand, they’ve been pitched as a modern alternative to high-interest credit cards. In some cases — like paying for a $1,500 laptop — spreading four interest-free payments can be a responsible approach, as long as you stay current.
Still, many experts warn about the twin dangers of habit-forming usage and financial invisibility. As Doug Hoyes, an insolvency trustee, succinctly puts it: “The temptation is very great to overspend… For the vast majority of people, you are taking on debt without really realizing it,” he told The Canadian Press. Investopedia’s analysis adds that while BNPL avoids upfront cost, it can result in overspending, hidden fees and credit damage if payments slip.
Real costs of convenience: Who’s using BNPL, and what it’s doing to them
Recent data show that younger Canadians and newcomers lean heavily on BNPL. Many cite affordability or budgeting as their reason — using it for essentials like groceries, telecom bills or takeout — rather than big-ticket items.
That ease of access, with little credit vetting, makes BNPL both attractive and risky. According to Duke University’s Common Cents Lab, breaking payments into small installments dulls users’ awareness of spending — making it “hard to sum up the total cost,” he told Global News. It removes the 'pain of paying' that comes with parting cash or seeing a lump sum on a credit card statement.
Read more: The ultra-rich are bailing on volatile stocks right now — these 4 shockproof assets are their new safe havens
What your personal finance strategy needs now
Track your real commitments: If BNPL is part of your payment mix, keep a clear record, so you’re not surprised when budgets collide.
Use BNPL sparingly and strategically: That $2,000 toolset you really need? BNPL might help if the payments are manageable and interest-free. A Netflix snack splurge every week? That’s when danger looms.
Protect your credit score: Many BNPL providers don’t report on-time payments, so they won’t help build your credit. But missed or late payments may still be reported or sent to collections. Don’t assume BNPL usage is invisible.
Consider safer alternatives. A low-interest personal loan, a short-term credit card with set payoff, or even an overdraft protection plan may be a better deal when interest or budgeting is at stake.
Stay informed: BNPL remains lightly regulated. That may change — especially as the market grows. Keeping an eye on emerging laws that can give you an advantage.
Bottom line
“Buy now, pay later” is part of today’s financial toolkit, but it comes with strings you may not see at checkout. Whether you treat it as a convenient workaround or a budget liability depends on discipline, tracking and context. For Canadians navigating rising costs or financial pressure, BNPL can work, but only if you recognise it’s a tool, not free money.
Sources
1. Global News: ‘Buy now, pay later’ services are getting popular. Can you manage the risk?, by Uday Rana (Aug 20, 2025)
2. MoneySense: What to know before you use “buy now, pay later” in Canada (Jul 4, 2025)
3. Investopedia: Buy Now, Pay Later (BNPL): What It Is, How It Works, Pros and Cons, by Sakshi Udavant (Mar 5, 2025)
You May Also Like
- Here’s how to retire in 10 short years no matter where you live in Canada — even if you’re starting with $0 savings
- If you’re still feeling the pinch this month — don’t panic. Here are 5 easy ways to fix your finances without a total overhaul
- How Warren Buffett’s simple buy-and-hold real estate approach offers a lesson for Canadian homeowners and long-term investors
- Approaching retirement with no savings? Don’t panic, you're not alone. Here are easy ways you can catch up (and fast)
Leslie Kennedy served as an editor at Thomson Reuters and for Star Media Group, followed by a number of years as a writer and editor and content manager in marketing communications, before returning to her editorial roots. She is a graduate of Humber College’s post-graduate journalism program and has been a professional writer and editor ever since.
