Should you use Buy Now Pay Later?

Buy now pay later (BNPL) is a payment option to spread the cost of a purchase rather than paying straight away. But what are the risks to consider before deciding whether you should use buy now pay later?

Buy now pay later is another way of paying for goods, but instead of paying the whole cost with your credit card, you instead select the buy now pay later option to spread the cost over time. PayPal, Clearpay, Laybuy and Klarna are all examples of the buy now pay later options available.

What does buy now pay later mean?

The buy now pay later provider pays for the purchase directly to the company you are buying from, which allows you to pay back the cost to the provider later in instalments. All buy now pay later options may work differently so you should always consult the terms and conditions for each one.

How does buy now pay later work?

The buy now pay later provider pays for the purchase directly to the company you are buying from, which allows you to pay back the cost to the provider later in instalments. All buy now pay later options may work differently so you should always consult the terms and conditions for each one.

Where can you buy now and pay later?

Buy now pay later apps and options on shopping sites are becoming increasingly popular credit options. This is Money found buy now pay later schemes to be the fastest growing online payment type.

Buy now later apps and buy now pay later options on consumer websites are becoming increasingly popular credit options to allow people to buy without paying the full cost straight away. As per This is Money , buy now pay later schemes are the fastest growing online payment method.

Klarna’s buy now pay later option is available now on many popular websites for shopping, from large retailers such as Amazon, to fashion companies such as Boohoo and New Look. Shopping directly on the Klarna website is now possible, meaning that you only have to visit Klarna to access a variety of brands that all offer this as a payment option. Paypal also recently introduced buy new pay later loans as a service, according to Global Banking and Finance .

Does buy now pay later affect your credit score?

Some buy now pay later schemes may not even require a hard credit check to be done to access credit. However, it is important to note that buy now pay later payments can affect your credit score if you are not able to afford the repayments on time.

Is buy now pay later a good idea?

Many credit loans are under regulation by the Financial Conduct Authority (FCA) but buy now pay later is still unregulated. This may mean there are more potential risks to consider, for example, some buy now pay later schemes may not do affordability checks to make sure that repayments are affordable based on your personal finances.

Is buying now pay later a good idea? If you can afford to pay for your products directly, it may be recommended to do this rather than using credit. This is dependent on whether you can pay back the repayments in full and on time. It is also worthwhile considering whether the buy now pay later option may encourage overspending and consider not using these services if they increase unaffordable spending.

How to buy now and pay later

If you decide to go ahead with buy now pay later, as a payment method after weighing up the risks and benefits, it is important to make sure you can afford to pay back the balance in full and don’t overspend. It is also worthwhile to read the terms and conditions and find out what the charged interest rate is before committing to spread the cost using a BNPL scheme.

Help with managing your finances

If you need help with managing your finances and existing debts, you can contact MoneyFixers.