Buy now, pay later is everywhere. Should you register? | Smart change: personal finance



Plan structures vary by company, but one of the more popular iterations splits your purchase into four equal installments, with the first installment due at checkout and the remaining three each two weeks apart.

For example, if your total is $ 200, you will pay $ 50 at checkout, then three installments of $ 50 over a six week period. These payments are often automatically billed to the debit or credit card you used to make the initial payment.

Unlike credit card issuers, a lot of businesses buy now, pay later, don’t raffle when you apply. They may perform a gentle pull, which won’t affect your credit score, or – in the case of Afterpay – they may not check your credit at all.

Because they don’t need strong credit, Buy It Now and Pay Later plans are available to buyers without a bad credit history or bad credit.

Many plans don’t charge interest, which means if you pay on time, you’ll only pay the cost of your purchase. But it is not guaranteed. Although Affirm offers interest-free financing, depending on the retailer, it can charge up to 30% interest.

Buying now, paying later, is it a good idea?

Whether you should go for one of these payment plans isn’t obvious, but here’s what to keep in mind.

Buy now, pay later, businesses make money in part by charging merchants a fee. They can do this, the argument goes, because they bring more business to the merchant – in other words, buyers buy more, through their service.



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