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Staying Out of Trouble With Buy Now Pay Later


As the Internet will not let you forget, you know you are a geriatric millennial if you read BuzzFeed listicles, and when it’s a slow news day, BuzzFeed trots out new listicles about signs that you are rich or signs that you are poor.  Making purchases on layaway has always been the province of the have-nots.  Say what you will about delayed gratification, but people whose credit is good enough swipe a credit card and leave the store with a new couch strapped to their minivan with bungee cords.  The only ones who pay installments for the couch but don’t drive away with it until it is paid in full are the ones who can’t afford to do otherwise.  In the past few years, buy now pay later (BNPL) payment options have become increasingly popular.  They have enabled people who otherwise would buy on layaway to gain possession of their purchases sooner, but they do not help people get out of debt.  If you are in a fragile financial position and are considering making a BNPL purchase, or if BNPL purchases have made your debt problems worse, contact a Plantation debt lawyer.

The Poor Get Poorer, Even With Buy Now Pay Later

BNPL services like Affirm, Klarna, Afterpay, and Zip have increased greatly in popularity during the pandemic.  They offer installment plans, usually a year or less, for purchases of a wide variety of consumer goods.  The consumer can take the product home after paying the first installment, and as long as you pay each installment on time, there is zero interest.  BNPL programs have helped people make major purchases without paying interest, but according to Grow From Acorns, more than half of BNPL customers have used the service to buy things they were not sure they could afford.  More than a third said that they had been late enough with payments to incur late fees.   In other words, BNPL can be just another debt trap and source of late fees.

Buy Now Pay Later Can Help Rebuild Your Credit, but Only If You Use It Carefully

Although BNPL can make your debt problems worse, it can also help you build or rebuild your credit if you don’t have a credit card.  If you have a credit card, BNPL offers ways to make major purchases by paying in installments without accruing interest like you would on a credit card.  It is best to use BNPL for major purchases, like furniture; if you can’t afford to buy something small without BNPL, you should probably wait to buy it.  Before you use a BNPL service, research its interest rate, if any, and late fee policy.

Don’t Let BNPL Make Your Debt Problems Worse

If you are struggling with so many installment payments that your budget is being stretched thin, BNPL is not the solution, but a debt lawyer can help you find a better strategy for dealing with your debts.  Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.

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