The Real Deal: Buy now, pay later options and how to navigate big purchases
Retailers are using buy now, pay later companies as a way for consumers to buy what they want and get it immediately.
The days of layaway have diminished when consumers would walk in to a retailer, choose an item and pick it up once it was paid off -- but not all offers are equal.
One of the things to look out for is to whether or not the company runs a full credit check. Some retailers run as hard credit check, some rent, some run a soft credit check and some don’t run a credit check at all.
Companies like Splitit and PayPal offer 0% interest and the option to divide the payments with installments with no credit checks.
Other companies like Klarna and Sezzle will run soft credit checks when the payment is divided up.
It is important to pick only one of these platforms and be an informed consumer before making purchases.
Some merchants like Macy’s and Nordstrom even let consumers use the buy now, pay later app in-store.
If a consumer is trying to fix their credit, the services that run credit could actually hurt their score. It is important if dividing payments, to make sure to make payments in the time specified. If the payment is made late, interest and fees could be added to the original price.
It is important for consumers to make sure that the purchase makes sense for their budget.
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