Buy now pay later services are offered by retailers and service providers so you can buy a product immediately and delay payment. You then pay off the product in installments over a longer period of time.
Buy now pay later services are often advertised as ‘interest-free’ or ‘0% interest’, but the cost will add up if you can’t make the repayments on time. Here are some things to look out for before using these services.
Late fees
There is usually a late fee every time you miss a payment or pay late. These fees can add up over time.
Monthly account-keeping fees
Some of these services charge you a fixed amount for every month you continue to use their service.
Payment processing fees
You may be required to pay a fee for each payment, on top of your set repayment.
Always check the terms and conditions before you sign up, as they can be different for each buy-now-pay-later service.
Most buy-now-pay-later providers do not check your ability to make repayments or your credit history. This means you could end up taking on more credit than you can afford and could have trouble making your repayments.
Stay in control when you use a buy-now-pay-later service by following these tips:
Plan ahead
Make sure you can afford the full price and that the repayments fit into your budget. Consider any other bills or financial commitments due at the same time as your buy now pay later payments.
Don't get into debt
Consider linking your buy-now-pay-In later account to your debit card instead of your credit card. In that way you are using your own money without incurring credit card interest.
Don't overcommit
Stick to a limit and aim to have only one buy now-pay-later at a time.
Ask for help
If you are having trouble making repayments, contact your provider straight away.