Buy Now, Pay Later: What You Should Know
As buy now, pay later products expand access to credit, consumers should be aware of risks
As Buy Now, Pay Later products grow in popularity, it is important for consumers to understand the potential harms of using these products.
While Buy Now, Pay Later — products such as Klarna, Sezzle, Afterpay, and others — are incredibly convenient, they do carry risks.
These products allow customers to purchase a product now — online or in-person- and pay for it over four installments, usually two weeks apart. So, the customer pays 25% of the product cost upfront and then spreads the next out in three additional auto-deducted payments. Assuming all payments are made according to schedule, there is usually no fee or interest accrued.
Cora Lewis of the Associated Press explains that if the basic terms are not met, Buy Now, Pay Later can be problematic.
Branded as “interest-free loans,” buy now, pay later services require you to download an app, link a bank account…
