DoorDash has a new ‘buy now, pay later’ option — but some experts are skeptical. Would you try it despite the growing ‘debt binge’ in the US?

Understanding the new payment options on DoorDash

Under the new partnership with Klarna, DoorDash users will have three choices when they pay for their purchases. They can:

• Pay in full at the time of the order.
• Pay in four, breaking up the payment into four equal installments that are interest-free.
• Pay later, which allows customers to defer payments until a specific time, such as the day that they get paid.

"This partnership empowers customers with maximum choice and control over how they pay – from groceries and the season’s big-ticket electronics to home improvement supplies, beauty and even their DashPass Annual Plan membership," the DoorDash announcement said.

Both the pay in four and pay later options are considered buy now, pay later (BNPL) products. On May 22, 2024, the Consumer Financial Protection Bureau (CFPB) issued new rules confirming that BNPL lenders should be treated like credit cards and consumers must be extended the same protections card issuers provide, including the right to dispute charges and to demand a refund after returning products purchased using BNPL.

Unfortunately, even with these protections in place, BNPL increases the risks of financial problems for consumers. Research published in Harvard’s Journal of Marketing shows that consumers who used BNPL were likely to spend more, with the likelihood of completing a transaction increasing from 17% to 26%. Basket sizes for BNPL orders were also 10% larger on average, and the increase in spending that resulted persisted for six months.

Financially constrained shoppers who often rely on credit were the most vulnerable to these spending increases, increasing their basket size by 14%.

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Experts are concerned about BNPL for DoorDash

The addition of Klarna as a payment method did not go unnoticed, with experts having a lot to say about the idea of borrowing money for takeout food.

“Eat now, pay later is an awful trap,” Douglas Boneparth, president of Bone Fide Wealth, said on X. “If you need to borrow to have a burrito delivered to you, you are the product. Nothing more. These companies aren't helping people. In fact, they are taking advantage of them.”

There's also concern that offering this easy access to credit could worsen the debt binge already going on in the United States. Debt binge is an over-reliance on credit of all types. As data from the Federal Reserve in February showed:

• Credit card balances were up $45 billion and hit $1.21 trillion by the end of December 2024.
• Auto loan balances increased $11 billion to $1.66 trillion.
• Mortgage balances increased by $11 billion to $12.61 trillion.
• HELOC balances increased by $9 billion to $396 billion.
• Retail credit cards and other consumer loans grew by $8 billion.
• Student loans grew by $9 billion and hit $1.62 trillion.

Continued borrowing at these levels may be unsustainable, and now consumers could add DoorDash debt to this list.

Unfortunately, researchers from the CFPB found that once people begin to rely on BNPL services, they do so again and again. In fact, the CFPB showed 63% of borrowers originated multiple simultaneous BNPL loans at the same time at some point during 2022.

So, while it may be tempting to pay for a food purchase in installments or defer payments until payday — especially if you feel like you need a treat and don't have much cash to your name — you likely want to avoid this option.

Instead, you should stick to a budget that includes a set amount of spending for things like DoorDash so you can splurge guilt-free without borrowing while also saving for the future. If you can’t afford an unnecessary purchase like DoorDash, just consider saying no to it and cooking at home.

Deleting apps that make overspending easy may be the next move. Getting back to classic home cooking can make a big difference in your total expenditures — even if you aren't financing your deliveries.