Large Purchase? Think Twice about Buy Now Pay Later


As the financial year comes to an end, people are taking advantage of the sales that most brands offer to their customers. It is not difficult to notice all the different appealing deals that shops are offering during this time. While it is a good idea to make large purchases such as cheap kitchen appliances during the time, you need to think about the way you are going to pay for it. Among the many offers that shops offer, one of the common services you will notice is the ‘Buy Now, Pay Later.’ 

What is ‘Buy Now, Pay Later’ scheme exactly? 
‘Buy Now, Pay Later’ or BNPL, in short, is a common scheme that is popular among the young generation. It is the reason why large retailers are offering their customers to take their purchases home immediately and then pay it in instalments over the next few weeks. It is one of the options that the retailers offer to their customers during checkout. You will be required to nominate your debit card or credit card to make repayments for BNPL. The amount would automatically get deducted according to the plan options that you have chosen for yourself. Manu people now opt for second hand appliances rather than going for such schemes. 

Why You Need to Think Twice before Opting for ‘Buy Now, Pay Later’ 
Even though the BNPL scheme is quite an excellent way to save money and delay the payment for a little while, it is essential to know what you are up for. Even though it is a great option for those who have a good hold on their financials, but for others, it can add l problems later down the line. There are plenty of things that can go wrong and here are some of the things that you need to consider – 

You Might be Tempted to Impulse Spend – When there is no need to pay for purchases up front, it can lead to impulse spending if you are not careful. If you are already on a tight budget, it is best to avoid the scheme altogether to avoid further getting into the debt cycle. 

Using Your Credit Card for After pay can Cause More Trouble – Many people connect their credit card to the After pay and then pay just the minimum amount every month. However, the interest will keep piling up, and you will end up getting further into debt that you would not want. 

You can Get Into Financial Stress – Many people sign up for BNPL services for their purchases, and when there are a lot of instalments involved, it can difficult to get track of it. When there are many different instalment payments during the same time of the month, you can have difficulty to cover all of them. 

It can Impact Your Credit Health – When you have difficulty in paying off your instalments, your credit health will take a hit. Since not all BNPL check the credit history of a person when offering the services, you might take up more credit than you wanted to. 

You can Have Difficulty To Get Future Loans – Your spending can significantly impact your ability to get loans. Most banks and financial institutions will check your spending history to determine if you are eligible for a loan. If you have a few after pay accounts, your chances of getting a loan might decrease. 

Tips to Help You Save Money on Large Purchases 
Before taking on BNPL scheme, it is crucial to determine if you need it or not. It is essential to not rely on credit cards when making purchases. If you know that a large appliance purchase is on the brim, you need to start saving for it. You need to set a budget for yourself and restrain yourself from shopping for things you cannot afford. 

It is important that you buy things that you can afford and do not spend more than what you can afford. Another way to save money is by purchasing cheap appliances online. You can get great deals online, and the best thing is that they would be delivered right to your home within a few days. While it might be tempting to buy appliances on BNPL scheme, it is best to avoid them entirely if you do not want to enter the debt cycle and then find it difficult to get out of it.

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