Benefit from Buy Now Save Later

26 May 2021

Firms and businesses have strived to put the client first and seek to give a positive experience shopping. Comfort is a central feature that consumers look for when shopping and that’s why many online stores are offering a new system of payment. This system is targeted at the younger consumers with a middle income as well as those without sufficient credit. What is this new system? Where is it offered? Let’s find out!

Buy Now Pay Later

The Buy Now Pay Later, or BNPL, is a retail financing option where the consumer is given the option to choose a no-interest instalment plan to pay for the item. Via this new system, medium-sized purchases, around $50-$600, could be paid in monthly instalments rather than at once. A survey by Ascent conveyed that the number of people that have used BNPL has soared by 18% since last July. As mentioned, there is no interest charged here, so the BNPL is a kind of short-term loan with no interest. On average, BNPL consumers have an annual income around $75-149K. This system if often known as “digital layaway,” however the consumer will get the product right away.

How does it work? When you check out, you’ll be asked to enter your personal details, such as full name, email address and phone number, together with your debit or credit card number. Your request to pay later is likely to be accepted within a couple of minutes. The time of the first payment differs from one website to another, as some would ask for an immediate first sum whereas others wait for the following month to kick off the monthly instalments. 

Credit Score

One of the best features of BNPL is that your credit scored is not affected and neither do you need a good credit score to qualify for this form of credit. However, in order to ensure that your score isn’t affected, you’ve got to be smart about your shopping by paying later sensibly and making your repayments on time. Why? When you’re borrowing and paying back on time, lenders will know that you’re a reliable consumer. However, the credit report might show that you’ve failed to pay back what you owe on time, lowering your credit score as a result. You should pay attention to this as it could have an impact of future loans, mortgages and credit cards tat you may apply for. Moreover, this doesn’t mean that you can go on a shopping spree and not worry about your money – lenders will have access to your account and find out that you’re desperate for cash. Bad news for you. 


BNPL sounds perfect – why wouldn’t you want to make purchases and pay in instalments? However, you should still be smart and make your payments in time as you’ll face penalties of around $10-15 and transaction fees, around 4-6%, that can damage your credit score. Furthermore, if you have a tendency to be late on your payment, some companies may start charging you with an interest.