After more than a year of sticking close to home, travelers are ready to book their own vacation. In the chance that your desire to travel happens to outpace your finances, a growing number of “travel now, pay later” services are making immediate vacations possible. 

Services such as Klarna and Afterpay give you the flexibility to afford that ultra-luxury hotel or to stay on vacation for a few extra days by staggering payments and slicing them into four rather than requiring one upfront payment.

Here’s how it works: 

You find a trip, flight, or hotel and see the Klarna or Afterpay option, you undergo a 30-second soft credit check, either through the apps or online, to determine the amount you qualify to pay in installments. You make the first payment(usually 25% of the total purchase) and get your trip or flight confirmation immediately. The service then charges the remaining interest-free installments of the total every two weeks directly from your preferred payment method until the total is paid. 

You secure the deal instantly, there’s no impact on your credit score and there are no fees. However, using these services doesn’t help build credit and their charges are initiated automatically, which means that even if your linked bank account gets low or your credit card is near its limit, those charges are still going to happen.

A nomadic friend of mine swears Afterpay saved her life on several occasions. She recalls times when she’d decide spontaneously to go somewhere new, but wouldn’t have the ready funds. “Afterpay was like having a virtual father, as it gave me the kick I needed; I had to find a job in my destination very quickly to be able to pay for how I got there,” she told me. Two years ago she used Afterpay to score the $1,400 open-ended flight to Tanzania that led to working with her current tour company.

The idea is catching on fast: Afterpay reported that it’s signed up more than 13 million users in North America as of January 2021. Different retailers have partnerships with different payment systems, so you might need accounts with multiple service providers to build the trip you want. For example, Airbnb offers payment through Zip (formerly Quadpay), while you can pay for trips on Booking.com and Expedia through Klarna. Here are some other things to consider.  

Can you spring for a pricier trip?

While these services can be a great way to avoid credit card debt and the interest that can come with it, financial pros caution against spending more than your budget allows.

Now keep in mind, that just because you have more time to spend your money doesn’t equal you having more money to spend. That pay in four services may ease the psychological impact of a purchase, but that doesn’t mean you’re paying less. Ask yourself, “If I can’t afford it now, how will I afford it within a 6-week time period?”

I’ve assisted clients who are currently planning to take bigger trips, either because they haven’t spent money on travel during the pandemic or they’re rewarding themselves for a difficult 2020. Revenge spending’ is a real thing, and travel appears to be a popular target!

Keep your budget conservative by thinking of Afterpay like borrowing money from a friend. Then you are likely to only borrow what you need, and not more. 

How can you maximize the benefits?

When you happen to chance on a cheap flight to your dream destination or an unheard-of deal on a hotel, services like Klarna and Afterpay can help you book it before it’s gone. Time pressure to lock in a great deal is common with travel. Offers can appear at a moment’s notice and often require you to act quickly. Having quick access to the cash you might not have readily on hand, could better position you to nab that heavily discounted red-eye to Dubai. 

Cindy Maxwell, a fellow travel blogger, used Klarna to book an upcoming trip to Cabo San Lucas in Mexico, and she’s planning to use it again to pay for a 2022 anniversary trip to Marrakesh. She says that using the service strategically makes it easy to budget for a bigger trip because she’ll buy one element (like a flight) and pay it off before adding the next (like a hotel). “It doesn’t matter if it’s flights, transportation, places to stay or even excursions, you can pay through Klarna,” Maxwell says. “You could book an entire trip abroad.”