Just imagine. You’re scrolling through Instagram, and you stumble upon an ad for your dream pair of shoes. The price is abit steep, but you see a banner below saying, “Buy Now, Pay Later”. Only 4 easy installments of $19.50! That looks affordable ! And you’re tempted to click that ‘Buy’ Button. But before you act, let us unravel the truth in this video. Are installment plans hurting your wallet?
KEY TAKEAWAYS
Installment Plans Explained :
Digital installment plans are like buy now, pay later setups. They split your bill into smaller installments you can pay over time. Over one-third of Americans have used buy now, pay later services , often to accommodate their budget or avoid credit card interest.
Commonly Known Digital Installment Brands :
- Afterpay
Afterpay allows buyers to split their bill into 4 equal payments over 6 weeks without interest and some do not have a minimum purchase requirement. They also have an app for in-store payments. But beware, late fees do apply.
- Affirm
Although Affirm offers more payment flexibility allowing customers to split the bill over a period they personally determine, the interest rates offered can be as high as 30% and if you don’t make payment when it’s due, it can affect your credit score!
Are Installment Payments Another Form of Debt ?
These “easy payments” companies are just debt in disguise. They aren’t a smart way to make purchases or a harmless alternative to credit cards.
