More holiday shoppers are using 'buy now, pay later' services like Affirm & Afterpay. Financial advisors warn that it's a useful tool that can quickly pile on debt.

• Buy now, pay later usage surged 85% during Cyber Week, according to data from Adobe Analytics.
• The services face growing scrutiny since they're unregulated and don't require credit checks for approval.

As the holiday shopping season kicks off, more people are choosing to pay for purchases in installments through services like Affirm, Afterpay, and Klarna.

According to recent data from Adobe analytics, "buy now, pay later" usage surged 85%, and revenue increased 88% during Cyber Week compared to the week before.

Money experts are torn about whether or not the growing popularity of these products spells doom for consumers.

The downsides of BNPL

In an email to Insider, Anora Gaudino, a financial advisor at Wealthspire, called it a form of "predatory lending."

"People don't realize that they end up paying a lot more for that product than it's worth. Often it's the people who are already struggling with bills," she wrote.

Buy now, pay later (BNPL) services can be used for just about anything: big-ticket purchases like a Peloton bike and everyday necessities like groceries qualify.

Kay Dickens, who owns Dr. Budgets, a service that helps people manage household funds, said he has recently seen more clients already deep in debt continuing to get approval for buy now, pay later.

"One of the clients that came to me, she actually had seven or eight different ones. They all had different installment terms. She didn't know when she was paying, how much she was paying, and honestly didn't even realize she had that many," he said.

"Being unsure of how many payments you're making makes it very challenging to manage the budget," he added.

Most popular services, like AfterPay, owned by Jack Dorsey's company Block, are digital payment platforms that allow shoppers to delay payments. Unlike credit cards, most BNPL services don't require a credit check and don't charge interest. But so far, buy now, pay later remains unregulated in most countries.

Barry Coleman of the National Foundation for Credit Counseling said the lack of regulation poses more risk for users.

"They may not have some of the consumer protections that come along with other credit products, like credit cards," he said.

Is BNPL cast in too negative a light?

Dickens said that for many clients who don't qualify for a credit card, buy now, pay later has been a helpful resource to fund purchases.

"If you're actually pretty good at spending your money and managing finances, it can be something that is good... Even if you don't have a lot of credit, you still have the ability to spread purchases over a couple of installments," he said.

Ryan Payne, president at Payne Capital Management, believes the discourse around paying in installments skews too negative. He thinks the uptick in usage is a good sign for the overall economy because it means shoppers feel confident about their finances.

"I think the job market is very tight, and if people feel like they're gonna be able to pay off those charges later, it probably speaks to the fact that they think they're going to have their job next year," he said.

Rules of the road

Many experts agree that using a buy now, pay later service can be helpful when shoppers exercise caution.

Coleman said people should try not to use the service too often so "they don't experience a situation where they're overexposed and have multiple plans going at the same time."

Dickens said he advises his clients to "Make sure you don't have more than two buy now, pay later installment loans. A lot of the trouble comes when you have multiple ones."