TROY — It’s crunch time for holiday shopping, and if your list is longer than your budget, you may be looking into buy now, pay later options.
According to Adobe Analytics, the popularity of buy now, pay later has skyrocketed, but it may not be the tool you want to use.
News Center 7 Consumer Reporter Xavier Hershovitz talks to a local financial expert to learn more about this option.
This year, consumers have spent nearly $65 billion on different apps.
Apps like Affirm and AfterPay offer buy now, pay later, but some shoppers compare this option to layaway.
“I think they’re a lot more expensive than the old traditional layaways,” Outlook Financial Center CEO Rob Burnette said.
Outlook Financial Center in Troy works to help manage and plan their client’s finances.
Burnette does not like this new payment option because it just delays the stressors that come with paying for something.
“It really comes down to do you want the purchase pain now or the purchase pain later and the pain later is going to be higher,” Burnette said.
These apps don’t have credit checks but typically add interest, which is concerning to Burnette.
“They’re doing their best to sell this as a great thing. But they’re still in it to make money and they’re just doing this in a different way,” Burnette said.
Some apps, like AfterPay, don’t charge interest. Instead, the payments will automatically come out of the attached account every two weeks over two months.
“That’s really a great thing because you’re using other people’s money. You’re paying it at the price you would have if you had cash the full time. Just be careful,” Burnette said.
While shopping, it’s important to know that you can afford something later if you utilize buy now, pay later.
“You don’t want to file bankruptcy for your Christmas shopping,” Burnette said.
It is extremely important to fully understand what you’re getting into while using these apps.
Anything charged on buy now, pay later this holiday season, will start requiring payments come January.