By JACKIE VELING of NerdWallet

Shoppers gearing up for the 2023 holiday season won't have to look hard for a convenient way to pay for all those presents.

" Buy now, pay later," a type of payment plan that divides the total cost of your purchase into smaller installments, is offered at most major retailers, including Walmart, Target and Amazon. It's expected to fuel $17 billion in online holiday spending this year _ up almost 17% from 2022 _ according to forecast data from Adobe Analytics, an analytics and measurement tool from software company Adobe.

The short application, immediate approval decision and no hard credit check can make buy now, pay later seem like a no-brainer financing option, but experts say it's risky. Ask yourself these five questions before opting in.

1. DOES THIS PLAN CHARGE INTEREST?

While most shoppers will encounter zero-interest pay-in-four plans __ which divide the cost of your purchase into four equal installments with the first due at checkout, and the remaining three due every two weeks __ longer, interest- bearing payment plans are becoming more common.

These plans range from months to years and charge an annual percentage rate of up to 36%, depending on the provider.

You'll want to avoid interest since it adds to the cost of your holiday purchases. But even if you get a zero-interest offer, make sure you can cover the installments, says Vaishali Shah, a certified financial planner based in Winston-Salem, North Carolina.

"With a 0% interest rate, it seems like no risk," she says. "But I want consumers to know they're still obligating themselves to these payments."

2. WHAT ARE THE FEES?

Though some buy now, pay later providers promise zero fees, many charge late fees, which are typically around $7 or $8 per missed payment.

Providers may also charge installment fees, account reactivation fees, card payment fees, payment rescheduling fees or service fees. These fees range from $1 to $15.

Read the loan terms carefully and keep in mind that there can be fees on the other side of the transaction. If the buy now, pay later provider withdraws a payment that causes an overdraft of your bank account, your bank may charge a fee.

3. DO YOU HAVE A PLAN TO PAY IT OFF?

Overextension __ or taking on more debt than you can afford __ is one of the biggest risks of using buy now, pay later, partly because of the delayed payment structure.

For example, a $100 purchase becomes $25 at checkout with a no-interest, pay-in- four plan.