• Buy now, pay later company Affirm is starting to offer loans for elective cosmetic procedures.
• BNPL works differently from a credit card — critics say it can encourage people to pile on debt. 
• It’s not just available for Botox, though. Dental and vet bills can be paid this way, too.

“Buy now, pay later” company Affirm has identified a new category for growth, according to a new report from Reuters: elective medical procedures like Botox, nose jobs, and even dental treatments.

Buy now, pay later options like Klarna and Affirm have become ubiquitous at checkouts on e-commerce retail sites for some time. Klarna even had a Super Bowl ad. But until recently, these companies have largely focused on retail purchases.

Now, BNPL is moving into the medical arena — a first for a major buy now, pay later company, according to the Reuters report:

Over the past year, Affirm has more than doubled the number of elective medical merchants on its network, reaching around 130 at of the end of 2023. The San Francisco-based company is hoping to tap growing consumer demand for financing for cosmetic treatments, dental services, medical devices and veterinary procedures.

“A lot of these price points are about $2,000 and above, so that suits our installment product … really well,” Pat Suh, Affirm’s senior vice president of revenue, said in an interview.

On one hand, financing cosmetic procedures is nothing new. A plastic surgeon or dentist may offer their own financing plans, and certainly, people use personal credit cards or other personal loan products for these things.

BNPL can appeal to people who don’t have a credit card, perhaps because they’re young and don’t have a credit history or have bad credit. This can be a good thing, giving purchasing power to those who wouldn’t otherwise have it. But BNPL apps typically don’t help people build credit. They don’t send positive payment information to the credit bureaus, but if your account goes into collections, it can negatively affect your credit score.

They can also trip those same people up. In 2022, a LendingTree report found that 42% of people who had used BNPL had at least one late payment. And those late payment fees can start to add up.

The services can also lead young people down a bad road, encouraging overspending with the allure of a seemingly low monthly payment. Business Insider reported recently how BNPL loans grew by 10 times between 2019 and 2023, creating a significant amount of “phantom debt” in the US economy since it’s not typically reported to credit bureaus.

I know: It can be hard to sympathize with someone who’s using lip filler they can’t afford by putting it on Affirm. But go back to what it’s actually being used for: “cosmetic treatments, dental services, medical devices, and veterinary procedures.”

That means it’s not just lip filler and Botox.

People who might need a root canal or a crown for a chipped tooth — the kind of necessary care that can be very expensive even with dental insurance — might be using Affirm. Or veterinary bills: any pet owner knows the horrible choice they face if their dog or cat needs an expensive surgery.