Buy now, pay later: Stores see increase in alternate app payment methods

Business

CHARLOTTE, NC (FOX 46 CHARLOTTE) – American consumers are buying now and paying later.

Similar to layaway, which was recently dropped by big box stores, BNPL allows people to pay for their items over time.

“It’s really a gift and a curse but it all depends on who is using it,” Credit Literacy Coach Markia Brown said.  “People who didn’t have the money, but we were using this because all I had to put down was $5, $10, $25 for $100-plus purchases.”

The payment method is typically done through apps like Affirm and Afterpay.

“So even if you are not just doing e-commerce shopping, you can literally scan your card if they take ApplePay and AfterPay will pay it for you,” Brown said.

Users must apply to use the programs, and while they don’t accrue interest missed payments could still impact your credit.

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“I think too many people were focusing on the pros and not understanding the consequences of missing those payments,” Brown said. “ People can’t make their payments and are wondering why Affirm is popping up on their credit report and are wondering why they owe all of this money all of a sudden.  They didn’t think about the total amount when they put the purchase in.  They just thought of the $25 they have to put down this day $25 down on this day, but now it’s popping up that they owe a thousand dollars, where is that coming from? So, then I have to break it down and really explain to them that they have to look at the whole picture when you are making these purchases.”

A recent survey by Cardify shows 45% of consumers planned to use the BNPL method to cover some or all of their holiday shopping.

“It makes it more enticing because in your head you can say, ‘I can manually calculate my paychecks and I know that I will have x-amount of checks to pay this off,” Brown said.”

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