Buy now, pay later! Sounds cool, right? Is it convenient or just a way to trap shopaholics? What do you think? Options to easily pay in four installments were recently introduced in a few developed countries.
The new payment method doubled the e-commerce transactions in the last year. However, since young people are not known for paying on time, it has negatively impacted their credit history. So, now the critical question is, are these new BNPL payment methods helpful or merely gimmicks.
How can one utilize these to maximum benefit? Financial advisors these days raise these questions frequently – let’s find out.
Buy Now, Pay Later
The method of shopping using credit and debit cards and later paying in installments is getting famous. BNPL allows users to purchase stuff and later pay in four easy installments like credit cards.
The only difference is credit card companies charge interest in case of delays. On the other hand, BNPL apps charge a late fee in delayed payments within the scheduled seven days. So shopping is being made convenient but at what cost? Your credit score?
Jessica Moorehouse, a financial counselor, says that as much as these options look viable, they are playing with psychology. People have started spending more than they can afford. The urge of impulsive buying stops them from building wealth and clearing debts.
Psychological Aspects Of Shopping
Financial advisors have highlighted the psychological aspects of shopping through BNPL options. While the credit card companies kept the interest low, online shopping rates soared during the pandemic.
According to a study conducted by Credit Karma, people who used BNPL missed more than one installment.
See, where are we heading? Yes, exactly more debts!
Here’s a suggestion to all buyers, especially youngsters: Every company has a different set of terms and conditions that one needs to go through thoroughly.
Reading Through Terms And Conditions
Stocking up everything through BNPL services looks like a convenient deal to many. However, little do the consumers pay attention towards reading the terms and conditions mentioned regarding missing payments.
In the modern-day, when we crave a luxurious lifestyle, BNPL can be a fantastic option to maintain the lifestyle. However, one should thoroughly review the pros and cons before adopting it to enjoy maximum benefits.
Happy Shopping, you all!