“Buy now, pay later” – four little words that can cause big problems if not handled with care.
It’s becoming as much part of Christmas as presents and decorations. But what happens when the time comes to pay up in the new year?
While it might feel like a lifesaver during the festive frenzy, these schemes can quickly turn into a source of financial stress if repayments start stacking up.
And it’s not just at Christmas – buy now, pay later schemes can cause problems all year round.
In this blog, we’ll dive into the good, the bad, and yes, even the ugly of “buy now, pay later”, helping you make informed decisions while steering well clear of unnecessary financial headaches.
Buy now, pay later – the good
- No immediate payment. No need to wait for payday! With buy now, pay later, you can grab essentials or treats on the spot, even if your bank balance isn’t quite there yet. Perfect for those “I need this now!” moments.
Interest-free periods. One of the biggest perks of buy now, pay later is the chance to spread your payments over weeks or months without spending a single penny extra – provided you stick to the plan.
Quick approval. Easy and fast to set up, often with minimal credit checks compared to traditional credit options.
Flexible budgeting. Buy now, pay later gives you more control over your cash flow, making it easier to handle unexpected costs or special occasions without throwing off your budget.
Potential credit boost. In some cases, using buy now, pay later responsibly can help build or improve your credit score – especially if the provider reports to credit agencies.
Buy now, pay later – the bad
Easy to overspend. Buy now, pay later makes purchases feel more affordable by breaking them down into smaller payments, but that can be a slippery slope. With no upfront cost, it’s tempting to load up on goods, gifts, gadgets, and guilty pleasures without fully considering the total amount you’re committing to.
Hidden costs. Miss a payment, and you could face late fees or even interest charges, wiping out the “interest-free” benefit that made the deal so appealing in the first place. Those extra costs can quickly snowball, turning what seemed like a manageable purchase into a much more expensive one.
Debt snowball. With multiple buy now, pay later plans, it’s easy to lose track of due dates and suddenly find yourself juggling more payments than expected. What started as small, manageable commitments can quickly snowball, leading to late fees, missed payments, and mounting financial stress.
Encourages impulse buying. Splitting payments can make purchases feel cheaper, increasing the temptation to shop impulsively.
Missed payments can hurt your credit file. With no upfront credit check, it might seem hassle-free – but missed payments could still impact your credit score if providers report your payment history to credit reference agencies.
How Northern Community Bank can help
We get it – when you’re caught up in the excitement of making a purchase, it’s easy to focus on the “now” and forget how quickly those payments can add up. But that’s when worry and anxiety can creep in, turning what seemed convenient into a financial burden.
At Northern Community Bank, we’re here to support you – not just for the “now,” but for your future too. We only lend what you can afford, with repayments tailored to your unique circumstances.
And if you are struggling to manage your finances or feeling overwhelmed by debt, we’re ready to help you get back on track. Our small loans start from just £150 and are designed to give you all the breathing room you need, without adding to your stress or creating further financial pressure.
Speak to our team today and take the first step towards feeling more in control of your money.
