NASHVILLE, Tenn. (WTVF/CONSUMER REPORTS) — If you’ve shopped online, you may have noticed a new option when checking out. It's a buy now, pay later plan.
The offer sounds enticing. You can buy something, get it delivered and pay for it later with no interest and no fees. But there are some really important things to know before you click and agree to buy now and pay later.
Javier Chairez bought some golf gear last year, and paid for it using a buy now pay later 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 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,’" he said.
In a statement, Affirm told Consumer Reports, “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. According to a Consumer Reports survey, 28% of people who used a buy now, pay later service reported having at least one problem, including being overcharged and having difficulties returning products or getting refunds.
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 Lisa Gill, a Consumer Reports investigative reporter.
For now, pay later users – don’t 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 said.
If you can’t pay on time, notify the company ahead of time because you may be able to reschedule a payment. Consumer Reports also recommends setting up autopay to avoid any late payment penalties.
