Nearly two out of five Gen Zers are refusing to pay for their next luxury bag or McDonald’s delivery order in its entirety upon checkout—and instead opting to use buy now, pay later (BNPL) services to pay in weekly or monthly installments. And for the first time, these services are even overtaking the long-standing popularity of credit cards. 

They’re finding BNPL a more flexible and simple way to stretch purchases across multiple paychecks, without accumulating high-interest debt.

Still, for a generation that struggles with financial literacy—including a love for “doom spending” their way through inflation stressors—experts warn that getting into a habit of using payment plans can be a mask for a dangerous game of overspending.

How buy now, pay later works—and why Gen Z loves it

Forty-four percent of Gen Zers said they used buy now, pay later services last year. That’s the equivalent of around 30 million young people in the U.S.—and Sabrina Rozza is one of them.

The 25-year-old tells Fortune she used Afterpay to finance a $4,000 vacation to the Dominican Republic. She says it was a “great alternative” to a credit card since she was able to make a down payment and then gradually make payments for six months. 

“It definitely helped with the budgeting. And in full transparency, at the time, I wasn’t making enough money to just pay it off on a credit card,” she says. “So it just gave me more of, like, more leniency to afford a vacation that I really wanted to go on.”

Rozza says most of her friends also use BNPL services, though mostly for purchasing clothes. And they are not alone: In today’s economy, half of Gen Z feel like BNPL helps them better manage their finances versus other payment options. They say its predictable financial flexibility and simpler borrowing terms is alluring. 

Gen Z: Read the fine print

Popular services, like Klarna, Affirm, and Afterpay, largely advertise consumers the ability to slice up their purchase via a loan that can be paid back in interest-free payments. 

However, the fine print reveals it is not necessarily always that simple. 

Their “pay in 4” program splits purchases into four interest-free payments paid every two weeks for roughly two months via a loan that’s left off credit reports (though, this could be changing). Depending on the price and merchant, a down payment may be required, and longer payment plans incur interest of up to 36% APR. 

Moreover, missing any payments can incur hefty fees. 

That being said, by and large, customers tend to pay the money back in time to avoid any penalty. According to Afterpay, 98% of purchases do not incur late fees and 95% of installments were paid on time. So, no Gen Z probably aren’t “drowning in debt” as reports have suggested—however, if they’re not careful, they could get in the habit of biting more than they can chew. 

But financial experts aren’t sold on the benefits of BNPL 

With inflation and market uncertainty rocking the economy, it’s no shock that Gen Z are exploring new ways to make their purchases. In fact, this year, 60% of Coachella’s ticket buyers opted for the music festival’s payment plan system—rather than paying entirely upfront, according to Billboard. And while it’s unclear how many purchases would have skipped out had they had to pay entirely upfront, it indicates how popular payment plan systems have become.

“Buy now, pay later encourages people to buy on impulse,” Noah Kerner, the CEO of financial services firm Acorns tells Fortune. “It encourages people to overspend.”

For consumers on the fence about a purchase, being able to postpone the price tag to a later date is enticing; in fact, one study found that shoppers tend to spend 20% more when BNPL is offered. Shoppers who sign up for more than one concurrent BNPL loan can quickly get into complicated financial trouble, especially considering there are now a half dozen popular BNPL companies.

While credit cards have been options for decades and have their own downsides, they do offer built-in guardrails: they report to credit bureaus and often reward users with points or cash back. However, according to Afterpay, 51% of Gen Z say credit cards give them the “ick” and about the same number of young people that could help them better manage their finances as compared to traditional credit. 

Fundamentally, Kerner adds, people should save up for the things they want to purchase because BNPL users can accumulate debt without it impacting their credit score—making overspending easier to ignore. 

“You should never spend more than you make,” adds Allyson Kiel, a private wealth advisor at Synovus Bank. “Credit card debt is a terrible place to be. Interest rates are unbelievable, and if you find yourself in that trap, it can be so hard to get out of. 

“If it’s a want and not a need, you should wait,” Kiel says.