Shopping can be stressful if you’re on a strict budget and can’t afford what you need. Buy now pay later stores make it much easier to get what you need with less money out of pocket right away.
There are hundreds of stores offering buy now pay later options. Each store has different guidelines or rules, such as paying in four equal installments, or for larger purchases, spreading the purchase out over 12+ months with a low-interest rate.
Read on to learn everything you must know about buying now and paying later including where to shop.
What are Buy Now Pay Later Stores?
Before you accept a buy now pay later agreement, you should know how it works.
As a general rule, you buy a product now, taking it home like you would if you paid in full. However, instead of making the full payment, you pay only a portion of the cost and spread the remaining payments out over the specified term.
How Does Buy Now Pay Later Work?
When you agree to buy now and pay later, you sign an agreement and generally set up direct payments from your credit or debit card. Some plans charge interest or late fees if you miss a payment, so read the fine print before checking out.
To apply for buy now pay later, you’ll choose the option at checkout if buying online. If you’re shopping in-store, ask the cashier if they offer the option.
You’ll complete an application that should take only a few seconds. It will ask for specific information about yourself including your name, contact information, birth date, and bank account information.
Most plans don’t do a credit check, so you don’t have to worry if you have bad credit. It also won’t put an inquiry on your credit report, damaging your credit score. Within seconds you’ll know if you’re approved.
On average, buy now pay later stores offer one of two options:
- 4 equal installment payments – This is the most common option. You pay 25% of the cost at checkout and set up 3 equal payments every 2 weeks to pay the balance off in full. This plan doesn’t usually charge interest and there’s no need for late fees since the payments are deducted automatically from your account.
- 3-month payment term – Some retailers offer a 3-month payment term at 0%. This gives you a longer time to pay the purchase off without incurring interest like a credit card would charge.
- Longer financing periods – Larger purchases often need longer payment periods, which buy now pay later stores offer, but with interest. You can stretch your payment over 12 – 24 months and pay interest of 10% - 30% on the purchase.
The Advantages of Buy Now Pay Later Stores
Buy now pay later stores have many advantages, especially when money is tight, including:
- You may not pay interest
- You get more time to pay your purchase off without incurring credit card debt
- Applying doesn’t hurt your credit score
- Your credit score doesn’t affect your ability to get approved
- You’ll know instantly if you qualify
The Disadvantages of Buy Now Pay Later Stores
Like any personal finance decision, buy now pay later options have disadvantages you should know including:
- You may buy more than you need and/or can afford because the lower payments make it seem affordable
- It’s easier to get in over your head in debt
- If you stretch the payments over 12 – 24 months, you’ll pay interest higher than some credit cards charge
- You could get in over your head since ‘pay in 4’ purchases automatically charge the payment to your credit or debit card every 2 weeks
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The Top Stores Offering Buy Now Pay Later Options
If you’ve decided buy now pay later stores are right for you, here is a list of the stores offering the option.
Amazon
You already know you can buy just about anything on Amazon and now if your purchase is over $50, you can apply for a buy now pay later option with Affirm. In general, they offer the 4-installment option or the 3-month 0% interest option. Larger purchases may qualify for a longer financing period with interest.
Target
Whether you’re shopping for essentials or a big-ticket item, Target offers two options to buy now pay later. Sezzle offers 4-installment loan options to be paid off in 6 weeks with no interest. For larger purchases, Affirm offers monthly installment loans (possibly with interest) to spread the payments out.
American Eagle
Shop for trendy clothing and make it more affordable using Afterpay, a buy now pay later service. With Afterpay, you’ll split your purchase into four equal installments, 25% at checkout and three equal payments every two weeks following your purchase. Visit American Eagle here.
Ulta Beauty
Get all your beauty needs at Ulta, and buy now pay later with Afterpay. Checkout like you normally would and you’ll pay 25% when you checkout with the remaining 3 payments automatically billed to the debit or credit card you provided every two weeks.
Nike
Nike uses Klarna for its buy now pay later options. You can choose to pay in full in 30 days or in 3 installments with the first installment collected when you check out.
Finish Line
Get your footwear needs and pay only 25% of what you owe at checkout. Finish Line uses Afterpay which requires payments every 2 weeks for 6 weeks but charges no interest.
Bed Bath and Beyond
Get all your household needs at Bed Bath and Beyond, and use Klarna to spread out your payments. You’ll pay in four equal installments with one payment made at checkout.
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Final Thoughts
Before using any buy now pay later stores offers, make sure you can afford the payments. When paid off on time, you’ll typically pay no interest and it won’t even show up on your credit report. If you miss a payment or default on your debt, though, it could damage your credit score and cost you more money than you intended. Used the right way, though buy now pay later options can be
