4. Skipping payment affect credit score

Skipping payments can cause late payment charges that might also affect your credit score. As a matter of fact, once payment is skipped or delayed beyond 30 days therefore information is sent to the credit bureau.

The primary objective of this program is to compel you into making payments.
According to reports, over 70% of individuals who take part in the buy now pay later programs eventually skip their payments or complete their payments at a later time.

5. Use with extreme caution

The program provides instant gratification but if your budget is tight, however, it may affect your monthly cashflow . That can prove difficult in meeting other important monthly obligations. When repayments start you realize there aren’t sufficient funds to easily and sufficiently meet them.

Think through before making any purchase carefully review the offer at home in a less pressurized environment. Ensure that you really need the item before purchasing it.

5.Affect monthly budgets

The primary target of companies offering the buy pay later services is millennials. If they skip a payment it can cause their credit to decline.

Despite the advantages of the shop now pay later programs. There is a range of ways you can get into problems with it. It’s critical to be in the know of how it could cost you more money due to fees or negatively affect your credit score.

The risks associated with Buy Now Pay Later

1. Encourage credit over-commitment

It’s extremely easy to set up multiple purchases without thinking about the total financial implication of their purchases through the shop now pay later program that doesn’t require credit checks before signing up.

2. No strict regulation on program

Anyone with two pieces of IDs and a valid address can qualify for shop now pay later programs. Unlike other programs like buy now pay later through credit card application requires a credit check. This offers tight controls as to who can qualify for more credit. Therefore, it’s extremely easy to accumulate more debt with the buy pay later programs due to lax regulations.

3. Shaping new shopping habits

With credit so readily accessible to buy almost anything like clothes, groceries, and appliances. This is changing people’s purchasing habits and reducing the negative perception of debt accumulating. In general the program encourages people to shop more than required if it wasn’t there. Many stores are targeting millennials which are having a bad effect on qualifying for mortgages and budgeting.

4. Prone to Pay Fees

Read the small prints carefully as most of them require timely payments. If you miss, or make a late payment on the account you may be charged a fee.

Pros of Buy Now Pay Later.

1. Quick Approval Process

Amongst many benefits of acquiring this service is the approval you get in a matter of seconds without any credit check. On the flip side, these benefits make it easier to spend more than required at times especially for those that are prone to impulse purchasing.

2. Enables you to purchase items when cash is low

Sometimes life happens and you find yourself in a situation where you come across an item that you desire right now but can’t purchase it due to limited funds or poor credit score.

In this case, you obviously look for alternative ways to get your hands on the item. This is where the buy pay later service comes into play. It allows you to purchase an item when cash is low.

Some buy now pay later websites allow you to achieve instant gratification and the opportunity to pay for the item in a year or more at a more convenient time.

For instance, if you’re broke and your fridge or dishwasher. The buy now pay later service can be used to purchase a replacement when funds are insufficient.

3. Ability to buy high ticket items at zero interest rates

In life, an emergency may hit at the worst of time when you have zero cash reserve. For instance, an appliance breaks down requiring instance replacement. The buy now pay later program allows you to purchase an item at a zero percent interest rate for 12 months or more. A busted appliance can be acquired with a low-interest credit card.

For instance, a zero percent credit card that has a deadline in about 12 to 15 months and subsequently increases to 16%. This is still way lower than traditional credit cards or loans that charge higher rates.

4. Able to purchase items at deep discounts

If you purchase an item during Christmas season, black Fridays, and any time of the year during sales. You can lock in a sale at a price that is much lower than regular.

Related: Beginners Tips of How To Buy A Car At The Auction (To Avoid Buying a Total Lemon)
 

Major traps of shop now pay later option?

The stores that offer buy pay later program take advantage of your perspective. The self-belief that your financial situation would improve in the foreseeable future.

You should consider other risks that might crop up before the repayment kicks in that would require a cash expenditure. Emergencies like tire puncture, a sick child, and dental work which may require outright expenditure should be built into your budget before taking any more debt.

Related: Why Paying Yourself First Lead to Positive Net Wealth

What is the solution?

In most cases, individuals who take advantage of the buy pay later scheme face challenges of making payments on-time.

Mostly it’s due to lack of personal finance skills, like budgeting, non-existence of the emergency savings fund, and high debt levels. Always keep in mind that these companies are typically promoting debts and purchases.

If you have difficulty paying debts and you owe a company, it is suggested that you reach out to them.

In this situation, companies can permit you to skip a payment or make a payment at a later date without any extra charges.. in addition, don’t consider a payday loan which might increase your debt.

Related: How Klarna Disrupts Online Consumers Landscape With Buy Now and Pay Later

Existing Buy now pay later guaranteed approval companies

There are so many shops with buy now pay later guaranteed program stores available out there.

Below is a list of popular websites where you can take advantage of the buy pay later option.

1. Lamp.com

At Lamps.com website you can easily purchase a contemporary lamp under $200 in four installments interest-free. This is much more affordable than paying the entire amount at once.

2. Zebit

At Zebit, customers are offered a buy now pay later system. The platform was launched in 2010 and among the best marketplace to shop for electronics, home furniture, and & jewelry for adults and babies.
The platform enables shoppers to purchase fitness, health, sports, and automobile items.

A major benefit of using this platform is that they would offer you interest-free credits up to about $2500 which can be used to purchase any item from their store.

3. Fingerhut

This platform is based in the US and considered among the best online marketplaces offering buy pay later option. At Fingerhut, you can have access to a wide range of products such as groceries, electronics, furniture, jewelry, and many more. It is suitable for individuals who have a bad credit history and having difficulty purchasing products.

4. HSN

Home Shopping Network also known as HSN is a US-based website that was also launched in 2010. It has different categories and a myriad of products from grocery, home, jewelry, automobiles, as well as other brands of products.

Shoppers also have the shop now pay later option through flexpay and the credit card of the store.

5. Ginny’s

The platform is suitable if you would like to purchase a phone and you are low on cash. You can take advantage of the buy pay later option without a credit check.

Apart from mobile phones, electronics, groceries, hardware, automobile, jewelry, and many other items can also be purchased on ginnys website.

The platform is also a retail point of sale for lots of top brands. However, you require a store credit card to take advantage of the buy pay later option.

6. Gettington

This is the ideal marketplace for shoppers who want the shop pay later option without a credit check. You are allowed to purchase any brand or product from gettington website for instance, computers, groceries, automobiles, hardware, and electronics using the store credit card.

Other merchants who allow buy now pay later service

Merchants offering buy now pay later options are PartPay, AfterPay, OpenPay, Laybuy, Paybright, OciPay, and so on. Each of these merchants has different timeframes for making payments.

Related: How To Save On Electricity and Water Bills in the Home (Without Seriously Affecting Your Quality Of Life)

Conclusion of buy pay later guaranteed approval service

Buy now pay later option is only ideal when you know that you are capable of making the required payments when due. For example, if you have enough emergency funds built up in place or have very low debt accumulated and you are good at budgeting.

An ideal option is to always think carefully before opting to buy. Be accountable by including your installment’s into your monthly budgeted expenses. Planning ahead is important and save enough funds before making the required repayments.

In addition, remember that you will always have to clear off your debts in the set months. Therefore, it is important to always avoid unexpected expenses that might hinder you from making the necessary repayments.

Another option to save up the required amount before purchasing the item. This method will prevent you from the traps associated with credits and help you lead a life without stress. To sum up, you should only use the buy now pay later option only when you ate certain that payment would not be skipped to avoid paying higher interest rates or missing the grace period.

In a nutshell, if you lack the financial discipline or if you can’t make payments due to a tight budget, it is ideal to avoid purchasing the item.

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