Be wary of fees, problems with Buy Now, Pay Later plans

We’ve long warned consumers about the risks of Buy Now, Pay Later plans. We’re especially concerned that some consumers are using BNPL to buy consumable necessities — food and gasoline. You’ll still be paying for your food over time when you need more. That’s unsustainable.

This holiday shopping season, it’s well worth it to warn consumers again. As I told Consumer Reports magazine during Black Friday week:

“Not everyone has access to a credit card, but those who do can get better protections by using one.”

Consumer Reports advocate Chuck Bell also has a new report on BNPL.

And as I told Bloomberg News, reprinted here in Yahoo!Finance:

“The marketing here is counting on a younger, perhaps less financially sophisticated spender because they haven’t been in the financial marketplace as long,” and [BNPL is] “only free when you follow all the rules.”

One other takeaway for you: Your credit card is due once each month. You can easily remember to make payments on time. But different merchants use different BNPL companies. If you borrow from more than one BNPL provider, how will you keep track of all the irregular automatic withdrawals and avoid late fees or worse?

My colleague Teresa Murray also has a recent update linking to our BNPL tips and our latest report.