Buy Now, Pay Later, abbreviated as BNPL, is a mode of payment that is used frequently by businesses to make purchases in real time. This payment mode provides buyers with a breathing space when making payments for their favorite products and services at a slight premium. Despite its benefits, certain mistakes made while using the payment mode can hinder the buying experience for many. Let’s look at some mistakes that one can avoid while using BNPL:
Not reading the fine print
The “Buy Now, Pay Later” plan seems sweet and harmless on the surface, but people and businesses may make the cardinal mistake of not reading the terms and conditions of the payment offered. These terms and conditions mention the purchase limit and interest rates, among other key details regarding the BNPL offer to their clients. When clients go ahead and use the scheme without reading the fine print, many of the things they blindly “accept” on the page can be turned back and used against them in case they default on payments or make any other mistake as per the fine print.
Overspending
Most people who opt for a BNPL scheme for the first time tend to go overboard and spend a lot more than they are accustomed to. Unfortunately, such people find out the hard way the unknown problematic elements associated with the Buy Now, Pay Later scheme. The returnable interest rates with BNPL payments naturally tend to be on the higher side. This is why people go into financial debt more frequently than not while using the positive elements of BNPL. In fact, around 1 in 4 Americans have stated on record in various polls that they immediately regretted using the scheme.
Defaulting on payments
Overspending can be a mistake, but not as serious as defaulting on payments with BNPL schemes. As implied earlier, the interest rates for repayments on BNPL options can be higher than some loans and credit card usage programs. When people default on payments for the first time, they are affected to a certain extent. However, if this is a repeated occurrence, the repayment penalties can quickly pile up. Eventually, the amount owed becomes out of reach, leading to legal problems and even the possibility of having assets and collateral confiscated.
