Groceries are expensive and for many families, budgets are tight.
With so many Americans working to stretch their dollar a little bit more, some companies are taking full advantage. Companies are using an offer that’s hard to ignore: buy now, pay later.
Amazon, Etsy, Walmart, and Wayfair are among the hundreds of companies using this payment installation offer.
“Maybe they don’t have credit or they don’t have any room left on their credit card, or it just seems like a more responsible way to pay that…that it’s kind of managing their cash flow,” says consumer expert Kevin Brasler, as to why millions of consumers are buying into the ‘buy now, pay later’ option. Brasler is with the non-profit Consumers Checkbook.
Can’t afford a new couch right now? With just one click and ‘buy now, pay later’ services, you can pay for it in installments. That’s how the service operates.
One of the advantages? No interest, unlike a credit card. But it’s not always fee-free.
“They advertise that there’s no fees, that there’s no interest, but there usually are late fees attached to these types of purchases. And a lot of people who take out these loans, as many as 40% end up paying late fees,” says Brasler.
Research from the Consumer Protection Bureau finds that the majority of people who use ‘buy now pay later’ services, do so multiple times a year.
“The problem is, if you lose track of all these offers, sometimes you can get overdrawn,” says Brasler. “So now that small purchase you made, or that big purchase you made becomes more and more expensive.”
His advice? Pay in full when you can, be conscious of all your bills and fees, and always read the fine print.