The summer of 2020 was a time of fear and uncertainty, and that's when the Colorado Springs woman turned to retail therapy. She was browsing the website for trendy athletic apparel like T-shirts and leggings.

Ms. Cole was interested in paying for her purchases. She was able to buy the clothing in four installments over the course of six weeks. A $50 T-shirt could be paid for with a $12.50 payment; a $130 pair of leggings could be paid with a $322.50 payment. She wasn't on the hook for paying interest because she was able to get the items before she paid.

Afterpay, a financial tech firm based in Australia, came up with the idea of buying now, paying later. As people hunkered down at home, they sought to fill voids with material possessions, which led to the rise of installments payment plans. Square acquired AfterPay for $29 billion in 2020. Apple will offer a similar program.

There are drawbacks to the financing programs. Personal finance experts said to be aware of your budget and in control of your spending for financial security. Critics said that pay later programs are meant to make people think a product is cheaper than it really is.

The Consumer Financial Protection Bureau was concerned that people could accumulate debt with multiple purchases.

Laura Udis, a program manager at the bureau, said that they can be helpful to consumers in that they don't carry interest if paid on time, but consumers can end up buying more than they planned.

Ms. Cole got caught in that trap. She said she increased her purchases from $200 to $400 using the installments. She received packages at her door daily. She regretted buying a $600 rug from Anthropologie.

Ms. Cole didn't pay her bills on time. After coming clean to her husband, she got a job at a bakery and sold some of her purchases on eBay to pay her bills. She stopped using her Afterpay account a few months ago.

She said that she had a beautiful closet full of nice clothes. It is filled with guilt and shame.

Pay later is impossible to ignore. You need to know what to look for.

The programs from companies like Afterpay and Affirm look the same, but they have differences.

Short term loans allow you to pay for an item in four installments over a period of about six weeks. The companies usually do a light credit pull after a consumer gives them some information. The down payment is 25 percent of the product's total cost, and the remaining three payments are due in two weeks.

The loans are interest free because the retailer pays a higher transaction fee than a credit card company. The benefit for the retailer is that they can get people to buy things they wouldn't have bought otherwise.

When you don't pay, what happens? There are differences here. Afterpay charges a late fee for missed payments. Affirm doesn't charge a fee, but late payments could hurt your credit score, which could hurt your chances of getting another loan

John Cabell, a director of banking and payments research at J.D. Power, highlighted that problem in a recent study.

It doesn't help you build your credit like a credit card does, but it can hurt your credit if you're not making payments in a timely fashion

The Consumer Financial Protection Bureau says that returns are a source of confusion for consumers who have used buy now, pay later. Consumers have to first contact the creditor and then freeze the payment schedule in order to inform the retailer of the return. The customer can contact the retailer and the creditor at the same time.

These are early days for buy now, pay later programs, which have many variations and unknowns. People who take out a loan would benefit from reading the fine print.

It can be beneficial to buy now and pay later. Mr. Cabell came up with the idea of using an installments plan to make a single emergency purchase, such as a kitchen appliance, so that the money doesn't leave a bank account all at once.

According to Mr. Cabell, most people don't use these loans that way. 21 percent of younger consumers say they use multiple buy now, pay later accounts, and most buy now, pay later purchases involve clothing and home furnishings.

It can get complicated when you have eight payments hitting your card.

The key to reaping the benefits of these interest-free loans is knowing you can afford what you buy. She said that it's important to avoid using installments as an excuse to buy more things than you need.

She believes she has kept the plans under control. She said she used the programs to pay for purchases. Payments are on time because they hit her bank account when she gets her paycheck.

She said it felt more convenient than seeing a big amount taken out of your bank account at the same time. She admitted that it was a bad thing that she didn't know how the loans would affect her credit score.