Be careful when clicking “buy now, pay later”

Sue Heilmayer, executive director of the University of Cincinnati’s Alpaugh Family Economics Center, spoke with Local 12 on the risks of relying on buy now, pay later apps to do your everyday spending.

Heilmayer told Local 12 that most shoppers under 30 have used the buy now, pay later model to make a purchase at least once. 

“They make it so easy,” Heilmayer said. “It’s a click away.” What gets hidden in that simple checkbox is crucial fine print. Heilmayer said buy now, pay later doesn’t offer protections like a credit card does.

Paying on time ensures no interest for most of these platforms. “If you do miss a payment, there’s late fees and interest,” Heilmayer explained. “And then it can be reported to your credit.” 

She said another huge downside is overextending your budget, adding that more than a quarter of buy now, pay later shoppers experience regret after purchasing something.

“If you’re going to use these apps, you should budget for the payment,” she said. Trouble can come up if payments start to overlap for multiple purchases. “It just stacks, and then you lose track.”

She also advised against ever using the payment model for food or delivery services. “The life of what you purchase should be longer than the length of your loan.”

See the full story on Local 12. 

Featured image at top of a stack of credit cards under a lock and chains. Photo/Adobe Stock