You might have the option to defer payment until a later time the next time you shop online because of the “buy now, pay later” option which enables shoppers to purchase things from selected stores and stretch the cost over six weekly no-interest payments. How safe is it to use, though? Despite the fact that there is no interest paid, there are consequences for missing payments, and the manner you handle this line of credit will be shared with credit reference bureaus.
What is the process and procedures?
At online checkouts of selected shops, you can choose lay-buy and instruct it on how to pay for your product or service. The minimum age to open an account is 18. Just your name, address, phone number, and debit or credit card information are required.
A credit limit will be agreed upon based on your credit score. You’ll have to pay a sixth of the total cost of an item up advance if you’re approved. The next week, on a day of your choosing, the final five instalments are subsequently charged. As an example, if you spend 60 on an item on Friday, you will pay 10 up front and have the option of paying an additional 10 each Friday for the next five weeks.
What will happen if you miss to pay?
You will be given 24 hours’ notice if you don’t make an instalment when it’s due before charging you a non-payment fee. You will be assessed an additional fee if the debt is not settled after seven days. If your payment is not received after 30 days, they will arrange for a debt collection agency to get the money you owe and notify credit reporting agencies of the default.
Should you avail of a buy now, pay later scheme?
“Buy-now, pay-later” services may tempt you to spend more money than you otherwise would on things like entertainment and clothing. There are shoppers who increased their spending and those who run into problems might use another high-cost overdraft or another high-cost form of credit, such a payday loan, to cover the repayments.
To avoid this to happen to you, you should truly consider if you can afford to make the purchase in question and make the required repayments within the allotted six weeks. Even if it means that you have the choice to “pay later”, you still need to make sure that you will have the money “later”. This scheme is advantageous to those who get paid on a weekly basis.
You also have to remember that your payback dates will be fixed when you avail of “buy now, pay later” payment schemes as soon as you make the purchase online. If finances become tight, you won’t be able to prioritize other payments like your rent or mortgage since you won’t be able to stop payments from being charged to your debit or credit card.
According to research, majority of consumers budget on a weekly basis, therefore giving people the freedom to buy things they want while staying within their weekly spending limits. If you are disciplined and able to fulfill the weekly payment, these buy now, pay later payment schemes is a safe, and more flexible way to shop online.