Buy Now, Pay Later (BNPL) services are everywhere these days. When you’re shopping online and see the option to split your purchase into smaller payments, it can feel like a no-brainer. Services like Klarna, Afterpay and Affirm let you buy something now and pay for it over time, many times advertising zero-friction perks such as no compounding interest or no effect on your credit score.
But, before you go all-in on these services, here are a few tips you should be aware of to avoid some common headaches and pitfalls:
When Small Payments Turn Into Big Surprises
BNPL plans can make it easy to spend more than you planned. Because the payments are broken into smaller pieces, the total cost doesn’t always feel so big.
The problem is that many people end up with several BNPL payments at the same time, and since these payments may all be handled by different financial institutions (each with their own respective app/website), it’s easy to lose track of them. Before long, you may be getting blindsided by multiple payments every month. If a payment is missed, late fees or added interest can increase the cost even more.
A Simpler Way to Borrow
Before choosing BNPL, it’s worth looking at other options that may offer lower rates and clearer terms.
For example, we offer financing options like:
- Personal Loans starting at 10.00% APR*
- Treat Yourself Loan starting at 9.00% APR*
- Credit Cards rates as low as 7.50% APR*
These rates are often much lower than the average credit card rate, and you’ll know exactly what your monthly payment will be, as well as where to find them – when you choose to borrow at Buffalo Metropolitan Federal Credit Union, all your payments are in one place and can easily be checked on anytime in our online banking site or app. No juggling!
Too Many BNPL Payments?
If you already have several BNPL balances and are struggling to keep up, you’re not out of luck – our consolidation loan can help. This allows you to combine multiple balances into one single payment, often at a lower overall rate.
Quick and Easy to Apply
You can apply for a loan at BMFCU online in just a few minutes, and easily check the status of your application anytime.
The Bottom Line
Buy Now, Pay Later can be a convenient option for borrowing, but it’s important to look at the full picture. In many cases, a low-rate loan or credit card can be a more affordable and easier way to manage your spending.
