Millennials want luxury sheets, Peloton exercise bikes and music festival tickets, but they don’t always have enough cash or a desire to put them on a credit card. So they are turning to an even more expensive method of payment: financing. In recent years, payment companies including PayPal PYPL, +0.15% , Affirm and Bread have created installment plans for retailers that give consumers the option to finance the weirdest purchases over time.

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These payment methods have taken hold at a time when millennials have been more reluctant than their parents to use credit cards. Millennials had about two credit cards each on average last year, according to the credit reporting company Experian. That’s compared with about three for boomers and an average of 2.5 for members of Generation X. Now, they don’t have to wait to be able to afford that Vitamix blender.

What could go wrong? Quite a lot, consumer advocates say.

How it works

The company Brooklinen sells pricey sheets: its “classic” sheet set for a queen-sized bed costs $129. But that can be steep for millennials, people born between 1982 and 1996, who are a core demographic for Brooklinen, said the company’s co-founder, Rich Fulop. “They want to pay more, they want to upgrade, but they don’t necessarily have the means to do that,” he said

What’s more, the company also sells to city dwellers who are looking for just a few sets of sheets to outfit a one-bedroom or studio apartment, he said. They’re willing to invest in higher-quality sheets, he said, even when they don’t have the money up front.

“ ‘If you’re looking for a way to finance discretionary purchases, look at your budget and ask yourself the hard question: Why.’ ” — Nick Clements, the co-founder of personal-finance company MagnifyMoney

That’s why Brooklinen partnered with the payment company Affirm in June to offer a payment plan spread over three, six or 12 months. Financing doesn’t come cheap: Rates range from 0% to 30% APR, after Affirm checks the buyers’ credit and approves them. That compares to an average APR of almost 17% for credit cards — or zero if you’re paying with cash.

Affirm has partnered with more than 1,000 retail partners since its launch in 2012, including travel site Expedia and furniture company Wayfair, according to Ryan Metcalf, Affirm’s chief of staff and director of international markets. Shoppers typically use Affirm’s financing plans for purchases over $200, he said, and the average loan is $800.

The most common purchase they finance is travel, he said, Affirm’s primary category by volume, followed by home wares and apparel. Metcalf wouldn’t say how many people default on their loans, but the rate is “well below the industry average,” he said. When a consumer has not paid Affirm back on time, the company sends reminders by text messages and email.

“ ‘We’re not in a position to judge what people think is worthy to finance or not.’ ” — Ryan Metcalf, chief of staff at payment company Affirm

If the consumer does not pay within 120 days, Affirm no longer lends to that person, and writes off the debt. Affirm then sends the remaining balance to a third-party debt collector, which Affirm supervises, but Affirm does not package and sell the balances, Metcalf said. Affirm makes its money from simple interest consumers pay, Metcalf said. “We’re not in a position to judge what people think is worthy to finance or not,” Metcalf.

However, personal-finance experts typically warn against making purchases, even on a financing plan, that consumers can’t afford. “You want to avoid financing these types of discretionary purchases,” said Nick Clements, the co-founder of personal-finance company MagnifyMoney, who previously worked in the credit-card industry. “If you’re looking for a way to finance discretionary purchases, look at your budget and ask yourself the hard question: Why.”

What consumers like to finance

PayPal offers two types of credit, both as part of a program called PayPal Credit. One option is to wait six months without paying anything, and no interest on purchases over $99 from select retailers. The other option is an installment payment plan called Easy Payments: Consumers pay interest at an APR of 19.99% if they don’t first pay off their balance within the term they select.

Before shoppers are approved for either product, PayPal does a hard credit inquiry, which can result in a few points docked from consumers’ scores, temporarily. But once approved, PayPal doesn’t don’t need to do a second one for future products. Consumers finance luxury handbags, guitars from Dave’s Guitars, pots and pans from Sur La Table and blenders from Vitamix, said Dana Warren, PayPal’s senior director of merchant distribution for PayPal Credit.

Vitamix blenders start at $450, an easier purchase for higher-income households, but “out of range” for some who are younger, said Holly Hacker, Vitamix’s director of direct sales and customer experience.

Shoppers have also financed items including Cartier bracelets, worth $5,000 to $6,000 and Chanel wallets, worth about $1,700 to $1,900 from Linda’s Stuff, a luxury consignment website run by Linda Lightman, the company’s founder and CEO.

Consumers and debt

The takeaway for the consumer? Always avoid making purchases you can’t afford. Many people are not in a position to buy pricey items, and spreading payments out over the course of months can be risky, especially if they faced a financial emergency, like a health issue or a lost job.

Some consumers have shown they tend to overspend: Americans now have more than $1 trillion in outstanding revolving debt, often categorized as credit-card debt, the most in U.S. history.

When consumers are considering taking on debt, they should carefully consider each option they have, Clements of MagnifyMoney said. Some credit cards, for example, offer 0% interest rates for a set period of time, such as Citi’s Simplicity card, which does not charge interest for an introductory period of 21 months, he said.

For example, if someone purchases a $450 Vitamix blender on a 0% interest credit card, and pays their balance in full before the end of the 0% interest period, they would pay $450 for the blender. Vitamix offers a period of 18 months with 0% APR through PayPal Credit. But if they are not able to pay it off in full, they would start collecting interest at 19.99%, which could amount to much more. PayPal Credit also charges late payment fees of up to $38 and returned check fees for up to $27.

If you can’t afford the monthly payments on the Vitamix blender, you should not buy one, Hacker added. “Our mission is to improve people’s lives, it’s not to put them in a position that makes anything worse.”