SOURCE: Andrew Rayo, Consumer Education Specialist
Some businesses offer “buy now, pay later” plans, which let you get your purchase right away and pay for it over a few weeks or months, sometimes without paying interest. Here’s what to know before you decide if a buy now, pay later plan is right for you now — and later.
Buy now, pay later plans might charge you low or no interest, and offer you a way to pay without using a credit or debit card. But that doesn’t mean the plans are risk-free. Many plans charge high late fees, per-transaction fees, or change fees, among others. When you use a buy now, pay later plan, you might not have the same protections you would if you paid with a credit or debit card. For example, the credit card protections for disputing a payment may not apply. Also, some plan providers may report your payment history to the three nationwide credit bureaus, so if you pay late or miss a payment, it could hurt your credit score.
Before you use a buy now, pay later plan to buy your purchases, know what you’re getting:
Know the costs. Are there interest charges or fees? Will the plan provider report your payments to the credit bureaus?
If you have a bad experience with a business when you’re buying now and paying later, tell the FTC at ReportFraud.ftc.gov.