Consumer Alert
Want to buy now but pay later? Read this first
Image
Planning to buy things like new clothes or electronics for the holidays, but want to pay later? Some businesses offer “buy now, pay later” plans, which let you get your purchase right away and pay for it over a few weeks or months, sometimes without paying interest. Here’s what to know before you decide if a buy now, pay later plan is right for you now — and later.
Buy now, pay later plans might charge you low or no interest, and offer you a way to pay without using a credit or debit card. But that doesn’t mean the plans are risk-free. Many plans charge high late fees, per-transaction fees, or change fees, among others. When you use a buy now, pay later plan, you might not have the same protections you would if you paid with a credit or debit card. For example, the credit card protections for disputing a payment may not apply. Also, some plan providers may report your payment history to the three nationwide credit bureaus, so if you pay late or miss a payment, it could hurt your credit score.
Before you use a buy now, pay later plan to buy your holiday gifts, know what you’re getting:
- Know the costs. Are there interest charges or fees? Will the plan provider report your payments to the credit bureaus?
- Check the reviews. See what others have to say, especially about disputing charges or making returns.
- Understand the risks. What happens if you miss a payment?
- Prepare for a credit check. Some plan providers require a credit check before you use a plan. To check your credit, order your free credit report at AnnualCreditReport.com or call 877-322-8228.
If you have a bad experience with a business when you’re buying now and paying later, tell the FTC at ReportFraud.ftc.gov.
Topics
It is your choice whether to submit a comment. If you do, you must create a user name, or we will not post your comment. The Federal Trade Commission Act authorizes this information collection for purposes of managing online comments. Comments and user names are part of the Federal Trade Commission’s (FTC) public records system, and user names also are part of the FTC’s computer user records system. We may routinely use these records as described in the FTC’s Privacy Act system notices. For more information on how the FTC handles information that we collect, please read our privacy policy.
The purpose of this blog and its comments section is to inform readers about Federal Trade Commission activity, and share information to help them avoid, report, and recover from fraud, scams, and bad business practices. Your thoughts, ideas, and concerns are welcome, and we encourage comments. But keep in mind, this is a moderated blog. We review all comments before they are posted, and we won’t post comments that don’t comply with our commenting policy. We expect commenters to treat each other and the blog writers with respect.
We don't edit comments to remove objectionable content, so please ensure that your comment contains none of the above. The comments posted on this blog become part of the public domain. To protect your privacy and the privacy of other people, please do not include personal information. Opinions in comments that appear in this blog belong to the individuals who expressed them. They do not belong to or represent views of the Federal Trade Commission.
Thankyou for supporting my trust and faith. I appreciate you! Happy healthy holidays.
Many companies use that "Buy now pay later" now, even credit cards,..
One of ours, a BIG bank, told us 3 weeks ago,: srarting Dec 24,2002, we have a NEW policy to help you: if your monthly statement is over 100 $, we will AUTOMATICALLY divide into smaller payments etc..... BUT when we called we learned.: there is 2.75 % interest each month+ late payment penalty +other etc.,,, We said: NO to this "auto-IOU:; we will pay our biils in full, or will contact you accordingly, or spend less.
We think this is not right to decide for us.!
Are they allowed to do that??
Thanks for the good job you are doing.
Happy and Safe holidays.
Many companies use that "Buy now pay later" now, even credit cards,..
One of ours, a BIG bank, told us 3 weeks ago,: srarting Dec 24,2002, we have a NEW policy to help you: if your monthly statement is over 100 $, we will AUTOMATICALLY divide into smaller payments etc..... BUT when we called we learned. there is 2.75 % interest each month+ late payment penalty +other etc.,,, We said: NO to this "auto-IOU:; we will pay our biils in full, or will contact you accordingly, or spend less.
We think this is not right to decide for us.!
Are they allowed to do that??
Thanks for the good job you are doing. Happy and Safe holidays.
If you can’t afford it now what makes you think you‘ll be able to afford it later
Is there a list of good/bad companies to deal with?
To the ftc.gov webmaster, You always provide great insights.