"The Hidden Risks of Buy-Now, Pay-Later Plans."

February 26, 2021 Social Business News

Spreading out payments is convenient, but you don’t get the same protections as credit cards.

More online shoppers are encountering a new payment method at the checkout page: put down 25 percent of purchase price, then pay off the rest in three equal installments over six weeks—no fees or interest charges.

Known as Buy Now, Pay Later, or BNPL, this type of instant, no-cost financing has become increasingly popular during the COVID-19 pandemic. Some hard-pressed Americans use it to stretch out payments for necessities, while others are buying big-ticket items without having to put down the full amount.

These short-term loans are also popular with consumers who can’t qualify for a credit card or other financing but would still like to enjoy the advantage of spreading out payments.

Leisa Meredith, a Tampa resident, for example, keeps a tight rein on spending as she rebuilds financially after a bankruptcy. So she opts for this payment method to buy shoes for her grandchildren.

READ more online at: https://www.consumerreports.org/shopping-retail/hidden-risks-of-buy-now-pay-later-plans/

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