Buy now pay later is the product that has come into existence due to the advent and popularity of online shopping websites. In case of buy now pay later service the consumer has the option to buy the product from an online shopping website but he or she does not need to pay instantly rather he or she can pay within the free credit period which is usually 1 month or maybe more depending on the website offering the service. In order to understand more about this concept, one should look at some of the advantages and disadvantages of buy now pay later –
Advantages of Buy Now Pay Later
Instant Gratification of Wants
The first and foremost advantage of buy now pay later is that consumer is able to purchase the good immediately without worrying about the payment for the good as one does not need to pay immediately under buy now pay later arrangement resulting in the instant gratification of want as far as the consumer is concerned. In simple words buy now pay later is like an oxygen pump just like an oxygen pump helps a person struggling for oxygen in the same way this product helps a person struggling for finance to purchase a good for his or her use.
Less Documentation
In the case of credit cards or loans, there is a cumbersome requirement of documents and is a time-consuming process but when it comes to buy now pay later there is no such requirement and the consumer can get approval for purchasing the product within minutes and the whole process is online thus making it even more convenient as far as the consumer is concerned.
Buy Now Pay Later has No Fees
In the case of buy now pay later there are no joining fees or annual fees which is the case with some variants of credit cards and hence as a consumer if you are paying your dues on time then this is the best option as there are no additional charges. In simple words, if you are one of those individuals who is paranoid about fees and charges associated with credit cards then buy now pay later is a better option as compared to credit cards.
Disadvantages of Buy Now Pay Later
Unnecessary Shopping
The biggest disadvantage of buy now pay later is that a consumer may end up purchasing unnecessary things which are not required by him or her due to using buy now pay later because the mentality of human beings is such that if you have to make instant payment with cash or debit cards than subconsciously you will think 10 times before doing any chopping but when you have to pay later than you get complacent and end up doing unnecessary shopping.
Higher Interest Rates of Buy Now Pay Later
As long as you are making payment on time than buy now pay later is a great thing but moment you miss the payment then it is a problem as interest rates are very high in some cases even higher than credit cards and thus as a consumer, you should be careful not to overspend as missing the payment can put your financial condition in jeopardy.
Buy Now Pay Later has Limited Use
Buy now pay later product is provided by specific websites or shopping applications and you can use that facility on that particular website or shopping application only thus limiting the use of this product, unlike credit cards which can be used anywhere whether for online shopping or offline shopping or making bill payment or for any purpose thus is a limiting factor if one compare buy now pay later with a credit card.
As one can see from the pros and cons of buy now pay later that while consumer stands to benefit from this service but at the same time if one is not aware about its cons then he or she can be in big trouble and that is the reason why one should be aware of the pros and cons of buy now pay later option.