Buy Now and Pay Later -what Are the Traps?

Many retail outlets are offering a payment choice that may be difficult to refuse. For a consumer who wants to buy a big ticket item like a vehicle or furniture, having the ability to forgo payments and still use the item is incredibly enticing. That is exactly what is offered with a “buy now pay later” payment plan, where the consumer gets their item and doesn’t have to make even one payment for months or in some cases, years.

This buy now pay later scheme seems almost too good to be true and it actually just may be if you’re not completely aware of how it works. There is always some terms and conditions involved with an arrangement like this. Depending on where you reside you may be required to pay taxes on the purchases that you buy at delivery. There is also often an administration charge that has to be paid for before you can take possession of your purchase.

Also be incredibly careful about the terms and conditions that apply to the interest rate that will be charged if the items aren’t paid in full once the free payment time period has ended. Quite often with buy now pay later plan you are agreeing to a very high interest rate that starts the day the contract expires. This is included in the contract that the buyer has to sign at the time of purchase.

If you approach the agreement with open eyes and a full understanding of what is expected of you both now and when the contract expires, you’ll avoid having to pay too much. Buy now pay later terms work very well for those people who want something yet want to keep their own money. Pay the debt before the due date and you’ll come out ahead with this payment plan.

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