Is the convenience of buy now pay later checkout options all that it’s cracked up to be? Keep listening to learn the pros and cons of buying now and paying later.
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Welcome to Money Tip Tuesday from the Making Money Personal podcast.
When online shopping, you might have noticed an option to check out with Afterpay, Klarna, or Affirm. These are the most well-known Buy Now, Pay Later providers.
Buy Now, Pay Later (BNPL) is a way to finance purchases so that you can pay for them in weekly, bi-weekly, or monthly installments rather than paying in total at the time of purchase.
This system is similar to layaway where purchase payments are split up into more manageable amounts; however, unlike layaway, with BNPL, you get your products upfront and make the payments after.
Every Buy Now, Pay Later servicer operates a little differently. Some will require 25% of the cost upfront with the remaining 75% split between 3 payments over the following 3 weeks, while others allow for zero-down payments.
If you’re considering Buy Now, Pay Later, weigh out the pros and cons first to see if you should avoid it or not.
Pros of BNPL:
Cons of BNPL:
Whether you should avoid Buy Now, Pay Later is dependent on your financial situation and financial discipline.
BNPL is a great option as a one-time solution to finance a big purchase such as a piece of furniture that costs a couple hundred dollars. You’ll be able to easily keep track of the term and bi-weekly/monthly due dates since it is only one item.
However, BNPL could be detrimental to your finances if you get into the habit of financing all your purchases.
Overall, it’s important to make sure you’re aware of the pros and cons, understand how BNPL works, and make the decision that is right for you.
If there are any other tips or topics, you’d like us to cover, let us know at tcupodcast@trianglecu.org. Like and follow our Making Money Personal FB and IG page and look for our sponsor, Triangle Credit Union on social media to share your thoughts.
Thanks for listening to today’s Money Tip Tuesday and be sure to check out our other tips and episodes on the Making Money Personal podcast.
Have a great day!
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