Buy Now, Pay Later – Part 1

Are you using a buy now, pay later plan?

Buy now, pay later or BNPL is showing up everywhere – sometimes to cover basic necessities. This is a system where a retailer allows you to stretch your payments for your purchase. Total BNPL spending last year came to $75 billion – a 14% jump from the previous year. Bankrate.com reports that more than a third of U.S. adults have used a BNPL service. With only a few questions to answer and flexible requirements, buyers are given a plan to split their payments over several weeks. Many don’t realize that this type of spending is a loan or legitimate debt. They’re simply attracted to low or no interest and easy-to-obtain credit. A recent survey revealed that 56% of users admit to overspending, missing their payments, regretting their purchases, or facing challenges getting a refund or returning the items.

When used responsibly, BNPL helps finance a large expense without interest charges. The key is discerning needs from wants and understanding the terms. Couples must be transparent with purchases to avoid juggling multiple payments. A problem for lenders is that buy now, pay later debt is not centrally monitored. Until that happens, we must recognize that total household debt levels are actually higher than what is reported. When considering any kind of debt, remember this proverb: “The rich rules over the poor, and the borrower is the slave of the lender.” (Proverbs 22:7)

Besides buy now, pay later debt, are you struggling to pay off your credit cards? Let Christian Credit Counselors help. They’ll create a debt management plan specifically for your needs. For more information visit crown.org/ccc.