Description
Is buy-now, pay-later a good idea? Maybe… With so many “money experts” out there, it’s hard to keep track of what’s fact and what’s fiction. Here's what to know.
We're debunking the internet's wildest credit myths to clear up the confusion and give you easy money fixes for the stuff you’re not sure about.
Buy-now, pay-later, or BNPL, loans are a type of short-term financing that allows you to split a purchase into equal, often interest-free, installments paid over a few weeks or months.
If you're considering one, keep these points in mind:
• With many short-term BNPL loans you won’t pay interest on your purchase. To avoid paying interest, you typically need to pay for the entire purchase within six weeks, which might be tough for large purchases.
• Some BNPL providers offer longer repayment terms — but it’ll cost you. These payment options charge interest, and rates for longer-term financing can be higher than the average annual percentage rate (APR) for credit cards or personal loans.
• If you make a late payment or it gets returned, you could be charged a hefty fee.
• Some providers report late or missed payments to the credit bureaus, which may appear in your credit report.
If you’re thinking about getting your first BNPL loan (or another one), consider comparing the loan terms and potential credit impact to that of a credit card or small personal loan. This can help you choose the best option for your financial situation and credit-building goals.
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Learn more -- check out this article: What is buy-now, pay-later, and how does it affect credit? https://www.creditkarma.com/personal-loans/i/what-is-buy-now-pay-later
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