The pros and cons of 'buy now, pay later' offers

The convenience of ‘buy now, pay later’ programs mean they are taking off. And retailers love them. But, be careful, they may not be a good idea for you.

‘Buy now, pay later’ means you can buy the item now with the promise of paying for it over time. It’s convenient. It’s easy. And great for shopper with no or low credit.

                   ‘Buy Now, Pay Later’ Benefits

  • Payment usually  made in four installments.
  • Payment generally submitted every two weeks. 
  • If you pay on time, it's interest free. 

Well it’s a good deal if you follow the payment rules to the T.  ScoreSense is a finance site that for a fee monitors your credit, offers credit checks, identity theft insurance and more. The group surveyed its members and found that 44 percent have used a ‘buy now, pay later’ option. But here’s the other part: 73 percent of them defaulted on their payments. 

"In that case, if you neglect to pay, miss a payment, or eventually default, all of that is going against your credit. So you have to be in a position like any other installment or revolving credit, make sure you’re in a position to pay that back," ScoreSense's Carlos Medina told the Fox 5 I-Team. 

You also have to remember that you may want to return what you’ve bought. You will get the money back for the purchase but not any interest you might pay. That's gone. 

Here are a few things to look for before you commit to a ‘buy now, pay later’ program.

Know if the applications requires a soft or hard credit inquiry. If you can get a zero interest credit card, that might be a better choice. You can establish credit. Be realistic about whether you can pay it off on time.