Buy Now, Pay Later (BNPL) services are increasingly popular among consumers for their convenience and ease of use. However, the allure of making purchases without immediate payment can lead to significant financial pitfalls. Many users find themselves juggling multiple BNPL loans for various small items, which can become overwhelming, especially with the bi-weekly payment schedule. Missing a payment can incur fees as high as 25% of the purchase price and potentially lower your credit score by 30 points. Experts, including consumer advocate Lisa, caution that while BNPL may seem like a free service initially, it can lead to longer-term loans with interest rates reaching up to 35%. Additionally, the process of returning items purchased through BNPL can be complicated, often resulting in continued payments for products that are no longer in the consumer's possession. While BNPL can be a useful budgeting tool if used wisely, over-reliance can lead to financial strain and credit damage.
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