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Buy Now Pay Later Schemes Like Affirm, Klarna, and Afterpay That Can Help You Save Money


Before buy now pay later programs gained popularity and became common around the globe, credit cards used to be the tool of interest for people who didn’t have enough money to pay for a purchase right away and wanted to pay later. However, credit card purchases almost always meant that you would be paying substantial interest on the original price of what you have bought. In contrast, buy now pay later platforms like Affirm, Klarna, or Afterpay can help you save money and avoid interest at the same time. Cool, right? You can visit thegigcity right now to find out all about stores and online websites that accept such modes of payments.

Are Buy Now Pay Later Platforms Easy To Use?

As the name suggests, these schemes let you make the purchase without paying the complete cost up front. Typically, the overall cost is divided into weekly or monthly installments that you can pay over time. Here’s a general overview of the procedure that you might have to follow when making a purchase through BNPL.

  • Choose the item that you want to buy at the retailer of your choice.
  • Then select the BNPL schemes through which you want to make the purchase.
  • Submit the requested information to the BNPL authorities and wait for the approval.
  • Once you are notified with the approval, make the payment as the first installment.

Before you begin to pay off the charges, you will be asked to select a payment plan as well. This is a schedule that highlights when you will be making the remaining payments and also which mode of billing would you use, for example, a debit card, checking account, etc.

COPYRIGHT_WI: Published on https://washingtonindependent.com/ebv/buy-now-pay-later/ by Alberto Thompson on 2022-05-26T01:12:44.632Z

The biggest advantage of the buy now, pay later strategy is that most apps like Klarna or Afterpay do not charge interest or they only charge it under specific circumstances. However, at the same time, BNPLs are not free of late fees. You may be charged up to $10 if installment crosses its due date. In fact, you are only better off using such programs if you can pay within the agreed terms. Otherwise, the late fees may outstrip even the interest rates that credit card charges making it an expensive payment plan.

Another thing to keep in mind is that each buy now pay later platform has its own application and approval processes. Most of these have been discussed in detail at perkstreet and as the website highlights, there are fair chances of rejection at times. Moreover, they do not have any feature that can help you improve credit score over time as is the case with credit card use. This is because BNPLs do not report to credit bureaus.

What About The Downsides?

Regardless of the long list of benefits that buy now, pay later schemes carry, there’s one thing to watch out for. BNPLs are easier to qualify for as compared to loans from banks or credit unions. They do not carry harsh interest terms either. However, you are still under commitment to pay the installments on time and failure to do so can have legal consequences. In fact, some companies follow strict protocols and you might have to serve time as an inmate if you are not able to clear the payments on time. The terms and conditions for such schemes are important to know especially since a large number of users, almost 30%, have pointed out that installments can get hefty to deal with and result in late fees and penalties. The exact penalty or the charges depend on the lender. For example, Afterpay has late fees up to $8, Affirm may charge $7 whereas Klarna does not have any clear policy on this matter right now.

Another major drawback, as financial analysts have pointed out, is that buy now pay later options encourage shoppers to spend carelessly. Under the impression that they don’t need to be equipped with the funds at the time of purchase, buyers show higher degree impulsive shopping ignoring what they can or cannot afford, what they do or don’t need. Typically, shoppers end up getting more of what they “want” instead of sticking to what they “need” and boosting their savings.

Take-Home Message

Buy Now Pay Later purchases are becoming more famous for gadgets, accessories, electronic appliances, and even jewelry. This shows that buyers are getting items with BNPLs when they don’t have cash in hand even when they are shopping for ordinary stuff. This can be troublesome in the long run because, as should be evident by now, paying later does not mean that you would be paying any less. At the end of the day, you still have to pay $80 for an item that was originally of this price. So, the bottom line is that, even if you are resorting to the buy now pay later method for completing a payment, you should not purchase anything you don’t have money for or don’t need unless you have enough savings to back it up. So to say, buying now and paying later may help you get the product you need immediately but can also contribute to getting under debt immediately too which is something you must watch out for.

Moreover, as we mentioned above, there are multiple options available in the market and you must properly investigate which one suits you best. Programs like Afterpay, Klarna, PayPal, Zip, Sezzle, etc. have variable terms of use, charges, and payment plans. You can always go through reliable websites for detailed comparison before you decide which one to apply for. Preferably, choose the one that ensures you won’t be accumulating debt over time. Additionally, choosing a buy now pay later scheme that is accepted by a number of retailers, in store and online, would be beneficial for you as well. You can explore the list of such stores online or visit their official websites to see which BNPLs they support.

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About The Authors

Alberto Thompson

Alberto Thompson - I live in Vancouver, Canada, and work as a web developer and graphic designer. Back end programming (PHP, Django/Python, Ruby on Rails) to front end engineering (HTML, CSS, and jQuery/Javascript), digital usability, user interface, and graphic design are all areas of web development where I spend my days. I'm a huge fan of web creation and design in all of its forms, as well as assisting small businesses and artisans with their online presence.

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