Many consumers are drawn to the convenience of "buy now, pay later" (BNPL) payment options, which allow them to make purchases with a small down payment and spread the remaining cost over several weeks. While this method can be appealing, especially for those who want to avoid high-interest credit cards, it is crucial to understand that using BNPL essentially means taking out a short-term loan. Many shoppers are unaware of the potential consequences of missed or late payments, which can include fees, debt collection, and damage to their credit scores. Research from the Consumer Financial Protection Bureau indicates that over 60% of BNPL users are borrowing multiple loans simultaneously, increasing the risk of falling behind on payments. To use BNPL responsibly, experts recommend budgeting carefully, understanding lender terms, and prioritizing paying off existing debts before taking on new loans. Ultimately, creating a budget and saving up for purchases may be a safer approach.
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