As the holiday shopping season kicks off, many consumers are turning to "buy now, pay later" (BNPL) plans such as Klarna and Afterpay to manage their budgets while purchasing gifts. These plans allow shoppers to pay for items over a few weeks without upfront interest, making them appealing for those looking to stretch their finances. However, experts caution that while the initial offer may seem attractive, users often overlook the potential pitfalls. Approval for BNPL is quick and easy, requiring minimal information compared to traditional credit cards. Yet, the fine print reveals that interest can spike significantly after the initial interest-free period, with late fees reaching up to $7 per missed payment. Additionally, studies show that BNPL users often have lower credit scores and may be more financially vulnerable. As more shoppers are expected to utilize these plans this season, it’s crucial to weigh the immediate gratification against possible long-term financial repercussions.
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