As Black Friday deals flood flyers and forums, Canadians are gearing up for holiday shopping with one goal — stretching every dollar. Now, there’s a new way to make that easier: PayPal (NASDAQ:PYPL) has launched its Buy Now, Pay Later (BNPL) service in Canada, allowing shoppers to split purchases into smaller, interest-free payments (1).
The PayPal BNPL program — already popular in the U.S. since 2020 — lets Canadians pay for items priced between $30 and $1,500 in four equal payments over six weeks, with no interest and no late fees (2).
More ways to buy — and more reasons to be cautious
PayPal (NASDAQ:PYPL) joins a growing list of BNPL providers in Canada, including Affirm (NASDAQ:AFRM), Klarna (NYSE:KLAR), Sezzle (NASDAQ:SEZL) and Afterpay. These services are often available at checkout with major retailers such as The Home Depot (NYSE:HD) and Ticketmaster, giving shoppers more flexibility when budgeting for larger or time-sensitive purchases.
For cash-strapped Canadians facing higher living costs, these services can be a useful bridge — provided they’re used strategically. Because merchants pay the BNPL provider, the shopper avoids additional fees, but that doesn’t mean it’s “free money.” Missed payments could still affect your credit score and spreading out payments may encourage overspending.
When Buy Now, Pay Later (BNPL) makes sense
Used wisely, BNPL can help Canadians manage cash flow or avoid costly credit card interest. For example:
- Emergency purchases — such as car repairs or home essentials — can be made without taking on high-interest debt
- Seasonal expenses — like concert tickets or gifts — can be spread out over several paycheques
- Budget management — smaller, scheduled payments can help some users stay disciplined
However, experts warn that multiple BNPL plans running at once can quickly become unmanageable.
To help, consider tracking all loans, including BNPL plan, in a budgeting app or spreadsheet; tracking helps to keep you on track so missed payments don’t add costs or hurt your credit score.
Alternatives for cost-conscious Canadians
If you’re looking to make purchases more affordable without taking on debt, consider:
- Price-matching programs at retailers like Canadian Tire (TSX:CTC-A.TO) or Best Buy (NYSE:BBY) —keep in mind, these retailers also offer BNPL
- Cash-back credit cards that earn rewards on planned purchases
- Layaway programs offered by some independent stores, which don’t involve credit checks
- Used or refurbished goods from verified sellers on platforms such as Facebook Marketplace or eBay
Bottom line
BNPL options such as PayPal’s can give Canadians greater control over their spending — if they use them responsibly. As interest-free instalment plans become more mainstream, consumers have more ways to manage expenses without relying on high-cost credit. But the best savings still come from planning ahead, tracking your spending, and resisting impulse purchases.
Article sources
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PayPal (1); Canadian Press (2)
This article originally appeared on Money.ca under the title: Smarter spending: How Canadians can use buy now, pay later without paying more
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.