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Should You Use 'Buy Now, Pay Later,' Credit Cards or Cash for Black Friday Shopping?

Picking the right payment method can help you save you money.

Courtney Johnston Senior Editor
Courtney Johnston is a senior editor leading the CNET Money team. Passionate about financial literacy and inclusion, she has a decade of experience as a freelance journalist covering policy, financial news, real estate and investing. A New Jersey native, she graduated with an M.A. in English Literature and Professional Writing from the University of Indianapolis, where she also worked as a graduate writing instructor.
Expertise Taxes, student loans, credit cards, banking, mortgages, investing, insurance
Courtney Johnston
6 min read
holiday gifts on a yellow background

Both BNPL and credit cards have benefits and risks. Here's how to choose.

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Black Friday deals are already here, and if you're planning to make a dent in your holiday gift list this week, you should consider your payment options carefully.

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Whether shopping online or in-store, you should weigh factors like security, cash on hand, convenience and budget when deciding on a payment method.

There are plenty of cash-back and rewards credit cards available to choose from. However, shopping isn't only a contest between credit and cash. The number of options at checkout is growing, both at physical stores and online. In addition to Apple Pay and Google Pay, there are PayPal, Venmo and CashApp. You can even pay with crypto using a debit card from Coinbase or BitPay, though it may not make sense for everyone. 

Not sure which payment method is best for you? We'll walk through the benefits and drawbacks of each to help you decide.


Credit cards

A good way to earn cash back or other rewards

There are plenty of reasons to pay with a credit card. Most of them offer safety features, such as EMV chip technology (designed to keep your card information safe), protection against fraudulent charges and purchase protection

Some credit cards also offer rewards each time you spend, like cash back, travel miles or points. If you need more time to pay back purchases, a 0% introductory credit card might be appealing. Plus, strategic credit card use -- like paying off your balance in full each month -- can help boost your credit score. Many even offer perks like purchase protection, which reimburses you if your purchase is damaged or stolen.

However, with interest rates rising to try and combat high inflation, credit cards can also be a risky choice if you can't afford to pay off your entire balance in time. Using them to buy expensive items you can't repay within 30 days can lead to interest charges and hurt your credit score. 

"Be honest about your intentions," says CNET Money Editor at Large Farnoosh Torabi. "If you want to use a credit card as a tool to buy you a few weeks to pay in full and possibly earn points or cash back in the process, that can work in your favor. Otherwise, it's best to save up your cash before making a purchase."

Javier Zayas Photography/Getty

Debit cards

A good way to stay on budget

In the most basic sense, paying with a debit card keeps things simple -- you can only spend what you already have, since the funds are pulled directly from your checking or savings account. That may make it easier to track your spending, and it could protect you from overspending. 

Some debit cards also provide security features, such as EMV chips, but generally have fewer protections than credit cards. (If you're still swiping instead of inserting your debit card, we recommend calling your bank and asking for a chip card replacement.) 

Debit cards don't offer the same perks you'll get from most credit cards, though. You can't earn rewards when you shop, for example. And if you're short on money and need to bridge the gap between paydays, a debit card won't help.

Nora Carol Photography/Getty

Buy now, pay later

A good way to stretch out payments

BNPL services like Affirm, Afterpay and Klarna allow you to make a purchase now via an installment loan and pay off the balance over time. If you're worried about repaying your balance in full at the end of the month, a BNPL service might offer a much-needed respite. When used strategically, these installment plan options could help you stretch out your holiday budget with minimal or no interest. 

Each BNPL service works a little differently. Some providers offer 0% financing while others charge interest, and repayment plans could be spread over 30 days or up to 36 months. 

One important distinction between BNPL services and credit cards is the way interest is charged. Credit cards charge compound interest -- this means interest accrues not only on the balance borrowed, but also on previous interest charges. BNPL services that charge interest do not charge compound interest, and they allow you to see the total interest you'll pay over the agreed-upon period of time up front. 

BNPL options may make sense if you need more time to pay back a balance and don't want to be hit with high interest charges. Just make sure to compare BNPL repayment plans before committing to one. 

"Beware of any late charges and how the payment company may report your inability to pay on time to the credit reporting agencies. While you don't need credit approval to use these types of payment services, failure to pay on time could lead to a ding on your credit score," says Torabi. 

To find a "buy now, pay later" plan, you can shop via the provider's app or website. You can also choose a BNPL option during checkout at a participating merchant's website. 

Read more: Here's how to book a flight using buy now, pay later

Francesco Carta fotografo/Getty

Digital wallets like Apple Pay, Google Pay, Samsung Pay

A payment options for more secure transactions

Digital wallets allow you to store payment information, like credit and debit cards, within them, for a more secure checkout experience. While these virtual wallets started as online-only payment options, you can now use Apple Pay, Google Pay and Samsung Pay -- the three most popular services -- in some stores, by pulling up the app on your phone.

This may be a good payment option if you're worried about security. Digital wallets encrypt your financial information and also use tokenization to keep your data safe. They're safest when used online or contactlessly in stores.

Sarah Tew/CNET


An online shopping option with multiple payment methods

If you're shopping online this holiday season, PayPal can help protect your payment information while offering additional options for financing gifts. Technically similar to a digital wallet, PayPal now offers other ways to shop, including QR codes for shopping in participating stores.

PayPal may make sense in a variety of cases: It's useful if you want to keep your debit card or checking account secure online, if you want to tap into credit options or if you want to try its BNPL service. Here's how you can use PayPal for holiday shopping:

  • Third-party processor: Using the classic PayPal service, you can link payments through your preferred payment source, such as a bank account or debit card, to make shopping more secure and convenient. It's similar to a virtual wallet, but is accepted at more major online retailers. 
  • PayPal Credit: This payment option functions like a credit card, and if approved you'll be able to charge transactions online, often with deferred interest charges. You can also apply to receive a physical PayPal credit card that you can use at brick-and-mortar stores.
  • Pay in 4: Paypal's BNPL service allows you to split the total cost of your purchase into four equal interest-free installments. The first is due the day of your purchase, and the others are billed automatically every two weeks. 

Read more: PayPal's Pay in 4 lets you pay off purchases over time. Here's how it works

Sarah Tew/CNET


Another way to shop online or at participating stores

Venmo, owned by PayPal, is most popular for allowing you to send money to friends and family, and to easily split shared bills when you're out to brunch or grabbing drinks. You can also use the Venmo app to pay for online purchases (with select merchants), the Venmo QR code in stores like Target and Walmart or apply for a Venmo debit card. 

This option might make the most sense if you receive frequent payments through Venmo and want to shop using money in your balance.

Sarah Tew/CNET


A way to shop if you have digital assets

While you can shop with cryptocurrency either online or using a crypto credit card or debit card, most experts advise against it. That's because the value of cryptocurrency fluctuates so often. Plus, every time you shop with it, you trigger a taxable event -- meaning you'll need to report the activity on your taxes.

More holiday shopping tips