For many holiday shoppers, the excitement of buying gifts with buy now, pay later (BNPL) plans has quickly turned into a financial headache as payment deadlines approach. While these short-term loans may seem appealing with their no-cost or low-cost terms, the reality is that late fees can add up significantly, sometimes reaching 25 percent of the loan amount. Additionally, missed payments can negatively impact your credit score if reported to credit bureaus. Consumer Reports advises shoppers to consider alternatives to BNPL plans, such as using credit cards for their purchases, which often come with rewards and consumer protections. If a credit card isn't an option, personal loans may be a viable alternative, with average interest rates under 11 percent. For those who still prefer BNPL, opting for a traditional pay-in-four plan can help minimize fees. Lastly, shoppers should be aware that returns can complicate the repayment process, requiring communication with both the seller and lender.
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