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Is 鈥楤uy Now, Pay Later' Right For You? Here's What To Consider - YouTube
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you're borrowing money that you don't
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have from a company and then paying them
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back you just want to get it over with
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fast and in fashion buy now pay later
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the trend that gives you more buying
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power by breaking one big purchase into
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four smaller payments every two weeks
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for example you get a one hundred dollar
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shirt but only pay twenty five dollars
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now then twenty five dollars every two
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weeks until the shirt is paid off but
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it's not just clothing walmart recently
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accepting it for groceries even texaco
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and chevron for gas allowing users to
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split up payments as prices climb with
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inflation
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by now pay later allows you to get what
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you want right now but critics say the
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easy lending can lend itself to reckless
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spending it's easier to
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split up the prices it makes you feel
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like you are paying less but in reality
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you aren't 19-year-old ava reinhardt is
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a full-time college student who says
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she's overspent and missed payments
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using these loans i definitely think it
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does enable me to like shop a lot more
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than i normally would but for others
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like erica wright a single mother of
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three by now pay later has helped her
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get groceries in between paychecks
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they are a lifesaver to be honest when
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you're able to use these apps to make
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large purchases that you may not have
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all of the money for upfront these apps
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come in super handy
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last year americans spent more than 20
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billion dollars with buy now pay later
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services the federal reserve says about
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half of those who use them say it was
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the only way they could afford their
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purchase
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but a recent lending tree survey found
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42 percent of users were late on a
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payment which can hurt credit scores a
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single late payment on your credit
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report can take 50 or more points off of
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your credit score how do you avoid
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getting in trouble one of the big things
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to know is yourself and your capability
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for managing your money we see it as the
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safest way for people to use
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consumer debt damian kasabji is the vice
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president of public policy for after pay
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one of the largest buy now pay later
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companies he says unlike credit cards
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which profit from high interest and
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revolving debt after pay users get cut
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off after one missed payment you drop
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them as a customer and eat that cost
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well that's effectively correct what we
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do do is pause the account and wait for
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the customer to come good on their
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payment before they're allowed to to use
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their purchases again yeah i think they
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tempt people to spend or buy things they
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may not need or to spend more than they
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should
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look i can't comment on whether someone
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is purchasing something that they need
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or not what we do see from some of our
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retailers is that someone may have gone
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online and decided that they wanted to
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buy a shirt and when they see that after
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pay is available they buy the jacket as
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well they buy more than they intended to
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they may have purchased something extra
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before you take out a buy now pay later
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loan experts say know the payment
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schedule if you can sync payments up
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with your paycheck and set up text and
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email alerts to remind you of upcoming
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payments and one more tip if possible
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pay upfront
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if you ain't got it don't try to spend
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it
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very good advice right now it's a bit of
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a wild west with these loans some report
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your late payments to the credit bureaus
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others do not and late payment fees are
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different for all of them by the way
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apple is now in the game two they call
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it apple pay later it's part of wallet
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it's also four equal payments every two
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weeks zero interest and apples has no
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fees of any kind so they if when apple
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gets into it you know it's gonna be a
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thing yeah two questions i mean first of
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all how does how does the process to get
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these loans how does that affect your
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credit or or does it so all of these
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companies that we talked to say that
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they run a soft credit check which won't
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hurt your credit score but again this is
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really new to the credit bureaus
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themselves they're starting to try to
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figure out how do they weigh the
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applications the missed payments and of
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course good payments too to factor that
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into your credit history but you just
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want to be careful and just make sure
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you can cover every payment before you
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jump into this sounds like it yeah all
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right thank you
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