BNPL payment plans require careful budgeting to avoid costly fees, expert says

Using “Buy Now, Pay later” (BNPL) has become increasingly common in recent years as people look at the division and financing they do.

According to the Credit Sesame Financial analyst Richard Parington, some of the main steps that people must take when using BNPL include the budget in advance, review the terms of the plan, and specify the fees that can be linked and prepare for automatic payments.

He said: “If you need BNPL to be able to pay the price of something, you must ask how to get money to create BNPL payments when you come due,” noting that the budget before time can help someone know whether they can get the bill for what they buy and any debts they can accumulate because of that.

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He recommended a review of the income that will come “over the duration of BNPL payments” and then put “all the basic expenses that you will get during that time” to help “know if you have enough BNPL payments.”

“If this is not the case, you are risking the loss of one of BNPL payments and incurred late fees,” he said.

A predetermined “can also help you avoid the inability to withstand the costs of one of these basic expenses because you adhere to a lot of money” for BNPL, according to Barington.

The financial name of the BNPL’s credit sessions urged a closer look at the terms of the plan in which they share.

“Learn the amount you must pay and when,” said Brington. “Also pay attention to what is happening if you don’t pay on time.”

He said that knowing the timing and size of BNPL payments can help to avoid stinging late fees.

The average late BNPL fee reached $ 7 to obtain a loan obtained at $ 135, according to the Richmond Federal Reserve.

“Avoid signing the BNPL agreement that you cannot take home and read it first.”

He said: “Many BNPL arrangements are made at the point of sale, as in the store. This means that you are trying to understand the terms during the steering wheel with many deviations.” ))

The general corridor by a bottom advertisement for KLARNA technology, a European e -commerce company that allows users to buy now, pay later, or pay in installments. (Daniel Harvey Gonzalez / in the pictures via Getti Earth / photos)

BNPL can have “strict payment conditions” that can lead to late fees, so it is important to know the costs associated with plans, according to Barington.

“These fees may seem to be somewhat low amounts, but since BNPL purchases are generally dedicated to relatively low -price elements, they can represent a large percentage of the purchase price,” he said.

Some of the ways that people can get rid of late fees from BNPL include the budget and know the conditions of the installment plan they use.

Moreover, he said that creating evaluation reminders or using automatic payment options can be useful.

When it comes to the automatic BNPL payments, Parington pointed out that people should “have to pay close attention to the amount and the temporal table” because “otherwise you may find yourself being exposed to the open cloud fees if your bank account does not have enough money to cover payments.”

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He said that some BNPL services are registered in automatic payments.

However, people should not come out more than one at one time, according to Barington.

“People often resort to BNPL loans when they face a problem in meeting their needs,” he said. “This will not become easier if they take multiple BNPL obligations that they will have to get money in the coming months.”

Some retail experts and financial lenders who say the purchase now say, and paying subsequent programs are the New Testament. (Istock / Istock)

He said, “Avoid using BNPL for anything that continues his productive life less time, which will take you to end the BNPL loan.”

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Another advice that Brington had to look at guaranteed credit cards or “to become a user -based user” instead of BNPL.

“The guaranteed credit cards or the presence of someone signs you as an accredited user of his card can be a way for people who do not have good balance enough to qualify for a card on their own,” he said.

Credit requirements can vary from the card to the card. The Americans got FICO from 715 on average last year, according to Experian.