SAN ANTONIO – Buy now, pay later services are booming, and no wonder.
You get your purchase now and you pay for it over a few weeks or months with no interest.
But, before you agree to one of these options at checkout, Consumer Reports warns about some potential traps and how to avoid them.
Texas retiree Javier Chairez bought some golf gear last year and paid for it using a buy now, pay later (BNPL) plan with a company called Affirm. There was just one problem.
“The retailer claimed that I received it. I didn’t. So, I started making phone calls,” Chairez said.
After contacting Affirm and explaining the problem, Chairez said he was surprised to learn that he was still on the hook for the weekly payments.
“I said, ‘You know, I’m not going to pay for this. I don’t have the merchandise.’ And I called Affirm, and I said, ‘Look, I don’t think it’s fair. Everybody has a recourse, except the consumer. I’m hung out to dry,’” Chairez said.
In a statement, Affirm said, “We do our best to support all Affirm consumers throughout their purchasing journey, including assisting with return and refund issues as they arise.”
But Chairez isn’t alone. In a Consumer Reports survey found 28% of people who used a buy now, pay later service reported having at least one problem, such as being overcharged, or having difficulty returning a product or getting a refund.
While no-interest loans can be enticing, a low- or no-interest credit card might be a better option.
“Credit cards give you better protections on purchases that are damaged on delivery or never received at all,” said Consumer Reports’ Lisa Gill.
If you’re going to use BNPL, Gill says be careful not to overextend yourself. Try not to have more than one or two loans open at a time.
“It’s also a good idea to stick with just one provider, so you’re not forced to juggle multiple loans with multiple vendors,” Gill added.
And if you can’t pay on time, notify the company ahead of time because you may be able to reschedule a payment. It can also help to set up autopay to avoid late-payment penalties.