NASHVILLE, Tenn. (WTVF) — Summer's around the corner and you may already be thinking about booking a summer vacation.
But what if you're a little short of cash right now? You may be considering a popular new option.
Daniel Iraheta says he has traveled to many countries over the years, but there’s one experience he’s never had—a cruise. Recently, while planning his trip, he came across 'Buy Now, Pay Later' loan options.
“I think it will be something that I will look into to be able to make this happen, which I really look forward to,” said Iraheta.
More than 95 million Americans used Buy Now, Pay Later Loans in 2023. While these loans cover a variety of purchases, travel is one of the fastest-growing categories, offering quick approvals, no hard credit checks, and easy installment payments. But Consumer Reports' Lisa Gill warns that these loans aren’t always smooth sailing.
“Unlike credit cards, BNPL loans don’t always come with the same consumer protections," said Gill. "If your trip is canceled or delayed, getting a refund can be a nightmare, sometimes leaving travelers stuck making payments for a vacation they never took.”
And then there’s the fine print. While some BNPL do offer interest-free payments – typically split into four installments over two months – others also include conventional loans with interest rates as high as 36-percent! So, make sure
you know exactly what you're signing up for!
“Some consumers end up with unexpected fees or sky-high interest rates, turning what seemed like a good deal into a costly purchase," said Gill.
And if your trip gets canceled, you may still be on the hook for payments! If this happens to you, reach out to the BNPL lender with proof that your refund is underway and ask to pause payments until it's resolved.
Because when it comes to travel, things don’t always go as expected.
If at all possible, use a credit card to book your travel. Depending on your credit score, many offer interest-free periods and provide stronger consumer protections, like easier refunds and dispute resolution.
Another option is setting money aside in advance to avoid debt altogether.
Do you have more information about this story? You can email me at jennifer.kraus@newschannel5.com.
Fundraising efforts are underway in Brownsville and Nutbush, TN to build a statue for a major superstar who was raised there, Anna Mae Bullock. You probably know her by her stage name, Tina Turner. I was a huge fan of Tina and glad to see efforts are underway to showcase more of her ties to West Tennessee.
-Lelan Statom
