Monday, June 23, 2014

Guest Post: The Merits and Demerits of Buy Now Pay Later

*Buy now pay later schemes are still not that popular in the Philippines, but they're slowly making their presence felt, particularly in appliance stores. This post from Catalogues 247 should give us the lowdown on what to expect with such schemes, to see if this is something that we can use to our advantage. 

Today, Buy Now Pay Later schemes, as well as other types of in- store credit managements, are on the increase in the UK. Simply put, in-store credit refers to the arrangement of buying goods or services in credit and then paying for them later. This facility is only available in certain stores or groups of stores. However, not many people think adequately about these schemes before opting for them. This kind of arrangement has both its advantages and disadvantages. Read on to find out about them:

Pros

  • You do not need to save a lot of money for an item. The big advantage with this scheme is that you will be able to spread payments over time. This way, you can factor in the additional costs into your monthly budget instead of coming up with a huge sum of money to purchase the product. Just make sure you have an interest free contract.
  • Enjoy the new item without waiting. If you are able to comfortably afford the monthly payments, then you could find this a very attractive option. It allows you to enjoy items at just a fraction of their actual cost, while paying the remaining balance over a period of time.  
  • It can help improve your credit rating. If you are able to make your payments on time, this can really work to your advantage as far as credit score is concerned. This prequalifies you to more credit in the future.
Cons
  • It can be expensive. Somehow the catalogue companies must make a profit. This means that even those companies that promise an interest-free contract will still charge you a little extra. Therefore, interest-free or not, you will still be paying more. Also, many catalogue companies include some hidden costs that add to the price of the item. To protect yourself from being ripped off by some of these companies, first find out the price of the item at the store and then compare it to what you are being offered at Buy Now Pay Later scheme. You could realize that the difference is as high as 25% or even higher.
  • You can only buy certain items under this arrangement. A big problem with interest-free schemes that catalogue companies offer is that they limit you to specific items from particular companies. Compared to other options such as personal loan or credit card advance that allows you to shop around and get the best possible deal. Thus, even if you get cheap credit from Buy Now Pay Later schemes, you will be forced to buy expensive goods with the credit.

*For more information on catalogues and in particular, buy now pay later schemes, check out Catalogues247

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