Many shoppers are looking for new ways to save and avoid debt. Companies know that Black dollars are important, so many of them target us with installment plans that allow us the get our goods up front and pay a bill later. Is choosing to “buy now and pay later” a good option?
The greatest issue with buy now, pay later is also its greatest strength. It’s an easy-to-use payment option.
This payment option makes it easier to overspend. Many shoppers pay using buy now, pay later with a variety of items, thinking that those small monthly interest-free payments won’t add up, but they do!
For example, say someone has a $300 budget to buy new clothes. With buy now, pay later, they will pay about $100 up front for all of their clothes and have $200 left over. With $200 left in their budget, they are likely to spend it on other things until they have none left for the later payments. They now owe an additional debt!
The bottom line is buy now, pay later makes it easier to overspend and increase our existing debt. Being mindful of what this payment option is used for and keeping track of our debt is our best bet to shop AND stay out of debt.