What Is Buy Now, Pay Later?
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How does buy now, pay later work?

How to get approved for buy now, pay later
- Credit score and credit history.
- The cost of your purchase.
- The funds available on your chosen payment method, such as your debit card.
- Any prior history with that provider, including how long you’ve had an account, past purchases, payment history, outstanding loans, etc.
Does buy now, pay later affect your credit score?
Should you use buy now, pay later?
When shouldn’t you use buy now, pay later?
Pros and cons of buy now, pay later apps
Pros
No-interest financing.
No hard credit check.
Convenient payment option.
Cons
May encourage overspending.
Not a reliable way to build credit.
May charge fees.
Customer service issues.
Pros
No interest:
Most BNPL apps charge zero interest for their pay-in-four loans. That means if you make all payments on time, you use the service for free. It’s rare to be able to finance a purchase, especially a bigger ticket item like a computer, at zero interest.No hard credit check:
Unlike applying for a credit card or loan, BNPL apps won’t usually conduct a hard credit pull, which can temporarily lower your score. Also, if you’re worried about a low credit score, you may have an easier time getting approved by a BNPL app than a traditional lender.Simple, convenient and fast financing option:
BNPL apps pride themselves on the simplicity and ease of their payment plans. Often integrated directly into the checkout process, applications are short and approval decisions are instantaneous, so you can opt into a BNPL payment plan within minutes.Cons
Could encourage overspending:
BNPL plans can make it feel like you’re spending less than you are. For example, if your budget for a purchase is $100 and you opt into a pay-in-four plan, you’ll only pay $25 upfront. For some shoppers, it may be tempting to go back and fill up their cart with more items.Likely won’t be able to build credit:
Most BNPL companies don't report on-time payments to the three main credit bureaus, so you won’t be able to build credit by using these plans. However, they may send past-due accounts to collections, which can hurt your credit score.Fees:
Though some BNPL apps won’t charge any fees, many do — especially if you miss a payment. Fees for late or rescheduled payments can range from $2 to $15, represent a significant percentage of the total and increase the cost of your purchase.Customer service issues:
Some BNPL users may have trouble settling disputes. For example, if you buy an item you need to return, you must deal directly with the store, even though your loan is through the BNPL lender. This can delay your refund.Compare buy now, pay later apps
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Frequently asked questions about BNPL
What are buy now, pay later methods?
What is the best buy now pay later app?
Which buy now, pay later app doesn't check credit?
How does buy now, pay later make money?
Article sources
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