Tempted by buy now pay later? Don’t get trapped

Although buy now, pay later (BNPL) can be a helpful way to spread payments, it is a type of debt and comes with risks. Did you know there are late fees if you miss a repayment? Be careful you don’t get trapped – that ‘pay later’ can quickly turn into pain later.

7 tips for using buy now, pay later

1. Think about the full cost. Buy now, pay later can be tempting because we think about the upfront payment, but we need to look at all of the payments in total. What’s the total cost of what you’re buying?
2. Make only one buy now, pay later purchase at a time. Try not to be tempted to take out more until you’ve paid the first load off.
3. Use buy now, pay later to buy larger-ticket items only if you have to. Better yet, save up for them instead.
4. If you must take out more than one of these loans, list them all and set reminders on your phone of when repayments are due.
5. Make sure to have enough funds in your account when repayments are due, so you don’t get charged late fees.
6. Don’t miss a payment. Missed or even late payments can mean massive fees and penalties, and paying late can affect your credit rating too.
7. Treat buy now, pay later like a debt, because it is. Debt can be really hard to climb out of, especially if money’s already tight, so always think twice before taking it on.

Get out of debt

We’ve all been there – you see a great sale but don’t quite have enough money saved up so you use BNPL. And then the latest smartphone is being released or you’ve got to buy a present last minute for one of your friends. Why not take out another BNPL for those too? After all, you’ve got the money for the first payment and it’d be great to be able to get it now and pay it off later.

Well, that’s where things can start to go wrong. It can be easy to lose track of what you’ve borrowed, and before you know it, you’re not keeping up with the repayments and those late fees start adding up.