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As we near the end of the Christmas season, we all know a lot of money is floating around and stimulating the economy. The “Buy Now, Pay Later” [BNPL] services are popular among individuals on a budget and those who are spending money they don’t have. The wife normally does all of the house shopping, and she’s really excellent at it. My purchasing abilities are limited, and it’s usually when I have to get something for her.
It wasn’t long ago that I learned about the “Layaway” plan, which is the BNPL’s predecessor. I questioned The Wife about how she was able to buy all of these items while we were talking about money because I knew our budget was tight. That’s when she admitted to using the BNPL services to make payments.
The only significant difference between Layaway and BNPL services is that with BNPL, you may pick up your goods the same day. Aside from that, they both serve the same purpose, with the same benefits and drawbacks.
Table of Contents
How does BNPL work and why it’s so popular?
As previously said, it lets you make purchases online or in-store utilizing various application services, walk away with your products, and pay them off as you go, making weekly, biweekly, or monthly payments according to the installment arrangement.
What are the benefits and drawbacks of using the BNPL apps?
Of course, it depends on your financial responsibility.
Benefits of using BNPL apps
No hard credit check.
It’s convenient and very user friendly.
If you pay on time, there are no fees.
Drawbacks of using BNPL apps
Not rewarded for paying your bills on time
Get reported to the collection bureau for missing one payment
Can be charged a fee for insufficient funds
Receive no perks like points, cash back or discount and purchasing power
Get no consumer protection
Buying on impulse
Related: 4 Credit Card Misunderstands
List of most popular BNPL providers/apps are:
- Affirm
- Klarna
- FuturePay
- Paypal
- Afterpay
- Apple
Instead, consider using a credit card
I understand that there are many misconceptions about credit cards, but using a credit card is the best alternative if you want to prevent any surprise costs and take advantage of any bonuses.
The ideal option is to pay in whole for your goods. If you can’t afford it right now, make it a part of your budget and pay for it later.
Have you tried “Buy Now, Pay Later” services before? If so, how was your experience?
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