Do your research before using buy now/pay later service to spread out payments

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QUINCY — Buy now/pay later is a service that many retailers offer to allow shoppers to space out smaller payments on an item over time, rather than paying the full cost up front.

Read the fine print before agreeing to one of these services.

In recent years, buy now/pay later plans have become particularly common with online retailers. Unlike the layaway services many retailers offered in the past, the buyer receives the item immediately but defers part of the payment. At face value, buy now/pay later is a way for shoppers to afford an item without a credit card. However, read the terms carefully before signing on so you’re not surprised by fees, interest or other charges.

Buy now/pay later plans are often run by third-party financing companies, and buyers usually must be approved by the financing company. While many of these services involve just a few small payments and zero percent interest, some charge interest rates as high as 30 percent. You may be charged fees for late or rescheduled payments.

Tips for using buy now, pay later:

  • Consider it a loan. A buy now, pay later plan is essentially a loan – even if you won’t pay interest. Ask yourself if the total price is more than you can actually afford, and make your purchase decision accordingly.
  • Stick to your budget. Bi-weekly or monthly payments could have a big impact on your budget, even if the payments seem small. Double check that the payment plan fits within your budget.
  • Know all the terms. Read the financing agreement in full before signing on. Make sure you know what company is financing, how long the plan lasts and how many installments you will pay, how they handle late or rescheduled payments, whether they charge an interest rate and if there are any other fees.
  • Research the retailer and financing company. Look up the retailer selling the product, as well as the financing company offering the buy now, pay later plan, at BBB.org to make sure they are reputable companies with honest business practices. You can read reviews, see a rating and find out if they are BBB Accredited.
  • Keep your credit in mind. Most installment plans do not require a credit check to use the service. However, keep in mind that unpaid debts can be sent to collections agencies and can be reported to credit bureaus after a delinquent period of 90 days. This could have a negative impact on your credit score.

Don O’Brien is the regional director for the Quincy Better Business Bureau. Contact him at
dobrien@quincybbb.org or (217) 209-3972.

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