How to navigate ‘buy now, pay later’ shopping services

SPOKANE, Wash. — Checking off your Christmas list could get even easier. ‘Buy Now, Pay Later’ services are giving people more flexibility to shop this holiday season.

The company ‘Afterpay’ reports there’s been a 34-percent increase in people opting in for the service which allows shoppers to split full payments into parts. Normal plans include dividing your product’s price into four chunks and then paying it over six weeks.

“There is a lot of buzz right now about these ‘buy now, pay later’ services,” said Amanda Swan, the Assistant Vice President of Community Development and Impact for Numerica Credit Union. “Automatically, that overall purchase price looks really attainable. It looks a lot lower, just psychologically it looks like yeah I can do that.”

A lot of people can use the services successfully if you’re responsible. Shopping like this could even help your overall financial stability.

“If you’re using ‘buy now, pay later’ and you’re actively using it responsibly, that’s going to benefit your credit score which is great,” Swan added.

It can also cause your score to drop if you aren’t careful even if the sites say they won’t tack on interest.

“Your activity and your response to those payments being due at a certain time will impact your credit,” she said.

A lot of big box stores are offering the service for shoppers, but local retailers are also jumping on board.

This is the first year Simply Northwest is allowing its customers to try the option.

“As a small business, we truly value every customer, every order, every purchase,” said Denielle Waltermire-Stuhlmiller, Simply Northwest’s owner.

She says they added it to the website to give shoppers more flexibility.

“Offering a different option on our website for them, a different form of payment, to allow us to expand who our customer might be,” Waltermire-Stuhlmiller said.

If you’re considering the craze Swan suggests asking yourself some simple questions:

  1. Have you budgeted this purchase into your spending plan?
  2. Does the overall price, and not the installment amount, exceed that budget?

While the installments make a product look less expensive, you’re still paying full price.

“Take advantage of conveniences that are out there but also do it responsibly. Do it within your financial ability to repay and is not going to put you into a tough situation,” Swan said.

If you want to learn more about budgeting for your holiday shopping and services like this, Numerica has free resources you can use HERE.