Buy now, pay later loans are often marketed as a smarter, lighter alternative to credit cards. Zero percent interest. No collateral. Fast approval. At checkout, it feels less like borrowing and more like a convenient payment option.
But Registered Financial Planner Rosemarie Gases says this perception is exactly where the risk begins.
“BNPL feels harmless because it doesn’t look like traditional debt,” Gases says. “There’s no plastic card, no bank branch, and no long application. But financially, it behaves very much like unsecured credit—and unsecured credit is always risky when it’s used without discipline.”
BNPL Is Still Debt—Just Packaged Differently
Gases stresses that BNPL loans are not fundamentally new products.
“At its core, BNPL is installment credit,” she explains. “The difference is how it’s delivered. It’s faster, less intimidating, and embedded into shopping platforms where people are already emotionally committed to buying.”
Unlike mortgages or car loans, BNPL loans are unsecured.
“There is no asset the lender can take back if you miss a payment,” Gases says. “That’s why interest rates and penalties exist—to compensate for the risk.”
While some BNPL plans advertise zero percent interest, she warns that this does not mean the loan is free.
“Interest is just one part of the cost. Processing fees, late payment charges, and compounding penalties are where many users get caught.”
The True Cost Shows Up When Payments Are Missed
According to Gases, many users underestimate how quickly BNPL balances can grow.
“People assume missing one payment is not a big deal,” she says. “But with unsecured loans, penalties add up fast, and the effective cost of borrowing becomes very high.”
She points out that some BNPL platforms charge monthly rates that rival or exceed credit card interest when penalties are factored in.
“What starts as a small installment can snowball if the user is juggling multiple BNPL purchases at the same time.”
This is especially dangerous, she adds, because BNPL balances are often spread across different platforms.
“When you have installments on several apps, you lose sight of your total debt. It doesn’t feel heavy until everything comes due at once.”
How BNPL Affects Credit Behavior
Another concern is how BNPL trains spending habits.
“BNPL encourages people to commit future income before it arrives,” Gases says. “That’s a problem if income is irregular or already stretched.”
She explains that many users rely on upcoming salaries to cover installments, leaving little room for unexpected expenses.
“One emergency is enough to disrupt the entire payment schedule. Then penalties kick in, and the cycle begins.”
Over time, this can affect creditworthiness.
“Missed payments don’t just cost money,” she says. “They shape your financial record and your relationship with credit.”
Why “Zero Percent” Can Be Misleading
Gases cautions consumers to look beyond promotional language.
“Zero percent interest is conditional,” she explains. “It assumes perfect behavior—on-time payments, stable income, and no disruptions.”
For many Filipinos, those conditions are unrealistic.
“Life happens. When it does, the cost of the loan suddenly becomes visible.”
She compares BNPL to a stress test.
“If your finances are already tight, BNPL doesn’t make things easier. It just delays the difficulty—and often makes it more expensive.”
Regulation and Responsibility
Most BNPL providers in the Philippines are registered financing companies regulated by the Securities and Exchange Commission. Still, Gases believes regulation alone is not enough.
“Compliance does not equal suitability,” she says. “A product can be legal and still be harmful if it’s used incorrectly.”
BNPL companies often argue that they are transparent about terms and that responsibility lies with users.
“That’s true to an extent,” Gases says. “But transparency doesn’t help if users don’t fully understand what they’re agreeing to.”
What Consumers Should Ask Before Using BNPL
Gases encourages consumers to treat BNPL like any other loan.
“Before clicking ‘pay later,’ ask yourself: Would I still buy this if I had to pay in cash today? Do I already have other installments running? Can I afford this if my income is delayed?”
These questions, she says, can reveal whether BNPL is being used responsibly—or emotionally.
“BNPL can be a tool, but tools can hurt if you don’t know how to use them.”
Gases does not believe BNPL is inherently bad—but she does believe it is often misunderstood.
“The danger is not the platform,” she says. “The danger is thinking that easy credit has no consequences.”
When borrowing becomes invisible, she warns, discipline becomes optional.
“And when discipline disappears, debt quietly takes its place.”
