Buy now, pay later financing is all the rage right now. You can spread out the payments – interest free, in some cases. Retailers offer it because it gets you to spend more money.
A new survey by Lending Tree shows how many people use buy now pay later loans – and they are loans – to break the budget.
“Our survey found about 70% of buy now pay later users admit to spending more than they would have if they had to pay for everything up front,” said Matt Schulz, Lending Tree’s chief credit card analyst. “And about 42% of users said that they’ve paid late on one of these loans before. And that’s a really, really big number.”
Remember: In most cases, buy now, pay later financing does not help your credit score, but could hurt it if you pay late.
“Your positive history isn’t reported to the credit bureaus, but with some of these lenders, mistakes that you make might be,” Schulz explained. “It’s really is one of those situations where it’s all downside and no upside.”
More Info: 42% of Buy Now, Pay Later Users Have Made a Late Payment
