TULSA, Okla. — As the holiday shopping rush ramps up, many people are turning to “Buy Now, Pay Later” to help cover gifts, especially if money is tight.
Consumer Reports says these plans, while convenient, can quickly snowball into debt and now missed payments may show up on credit reports.
It’s easy to be tempted by Buy Now, Pay Later.
A Consumer Reports’ investigations have found Buy Now Pay Later can lead to overspending and sometimes debt. People who miss Buy Now, Pay Later payments can get hit with higher-than-expected fees or interest, and those missed payments can even show up on their credit report.
Some Buy Now, Pay Later lenders report missed or late payments to the credit bureaus, which could hurt your credit score just like missing a credit card bill. That’s why it’s so important to stay on top of the loan payments.
When using these services, Consumer Reports recommends:
- carefully selecting which loan you’re applying for
- determine if it will charge you fees or interest
- avoid taking multiple loans out at once — if you do, try to stick with the same company so you’re not managing payments from various places
- set reminders for every due date so you don’t miss a payment or risk overdraft fees
And keep this in mind when it comes to returns it’s much easier to sort those out with a credit card. With Buy Now, Pay Later, the process can take longer, and you may still be on the hook for payments until everything is resolved.
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