Buy Now Pay Later Warning Issued
Buy Now Pay Later can be beneficial to most, but a recent report from Citizen Advice shows concern especially for younger customers who fail to pay within the allocated time scale. Not doing so results in interest being back dated and increasing the overall cost.
Young adults between 25 and 29 have on average £1300 of Catalogue debts. Buy Now Pay Later allows you to spread the cost over a set period of time, during this time, you are required to pay off the entire balance to avoid interest. Not doing so will result in the interest being back dated and this can increase the debt by several hundred or even thousands of pounds.
One shopper bought a £700 laptop from a catalogue company on a one-year interest-free deal.
Citizens Advice said he developed health problems which meant he had to give up work, and he struggled to pay back the final instalment of £150 during the interest-free period.
He was left with an interest bill that cost nearly as much as the laptop.
The charity also helped a man who bought a £600 tablet computer on a similar one-year deal. He still owed £100 at the deadline.
As a result he received an interest charge amounting to more than the cost of the tablet.
If you are concerned or know you cannot pay the entire amount owed within the time of the Buy Now Pay Later option, it's best not to take the offer, if you have and are struggling ensure you take advice from Step Change here.