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Buy Now Pay Later
Buy now pay later, ninety days same as cash, interest free financing, no payments for a year, your credit doesn't matter! Haven't we all heard this before? Our parents and their parents before them never would have thought of using credit to the extent that most Americans do on a daily basis. There is no wanting, just buying! Interest-free come-ons from retailers may be tempting, but consumers unaware of contractual details may find themselves in a trap. According to Bankrate.com, these types of buying incentives are designed to get customers into the store to buy things they often can't afford, and subsequently, it convinces some people that they can have any item or luxury without actually paying for it.
As you can see, buy now pay later is a way to fulfill all the wants, and not necessarily the needs. Many purchases made with this type of credit are things that we simply don't have to have at any given moment. Sure, it would be nice to have that great 48" flat screen monitor displayed nicely on the wall in your office, but do you really need it? What happens if the buyer's financial situation changes dramatically for the worse during the promotional period. The payments start in and you can't afford them, even though you could when you bought the item. The debt will never go away, and by getting sucked into a buy now pay later mentality, nothing will ever get paid off. You'll never get caught up. Just remember, that if it's a want it can wait.
Where consumers end up with the short end of the stick is when they fail to read the contract thoroughly and ask questions about any ambiguous statements they may not understand. A credit purchase is a binding contract that if not met can cost big money in the long run. Of course not every consumer who buys on credit finds themselves unable to pay. For many people it's a great purchasing incentive for an item they may have been planning to purchase at a later date; the item goes on sale, and with this great promotion, who could pass it up? This type of buyer usually has the cash to pay for the item at the time of the purchase or before the promotional period is up. This works great if you are financially disciplined, but unfortunately many people are not! Before you buy now pay later, do your homework and know exactly how you’re going to get it if you don’t stick to the contract!
Summary
Buy now pay later agreements can be very useful for people who may have bad credit, and don't want to rely on purchasing a big ticket item using credit. Be sure to read the fine print and find out exactly what the costs are with the contract and your responsibilities for repayment so there are no surprises later on.
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