Christmastime can be expensive during a normal year, but with the past two years we’ve had, it can get even harder to afford Christmas.
If you don’t want to rack up credit card debt and pay the price all next year, you may think about buy now pay later Christmas presents.
Here’s everything you must know about the program and how it works.
How Does Buy Now Pay Later Christmas Presents Work?
As the name suggests, if you buy now pay later Christmas presents, you take the presents home now, wrap them and gift them. You pay for them over time, though, just not as long as a credit card.
Most BNPL plans split the cost into 4 equal installments. You make the first installment at checkout and the remaining three every 2 weeks. For example, if you bought a $100 gift, you’d pay $25 today, and then $25 every two weeks until it’s paid off.
You must link your debit or credit card to the plan, though. They will automatically withdraw or charge the payment. If you link your credit card, make sure you pay it off right away to avoid interest charges.
What to Look for in Buy Now Pay Later Plans
You’ll find that many stores offer to buy now pay later plans for Christmas gifts. You may see payment options from:
Each of these buys now pay later companies. Each company operates a little differently but with the same premise. You pay 25% of the purchase price upfront, take the item with you, and pay the rest in 3 more equal installments.
You may come across other plans as well, and if you do, make sure you look at the following:
- Payment terms – Don’t assume every BNPL plan offers 4 equal installment payments with no interest or fees. Read the fine print to make sure it won’t cost you anything to use the plan. Also, make sure you can afford the payments.
- Interest – Typical BNPL plans don’t charge interest. If a plan charges interest, it may be because the terms are longer term than 4 installment payments. Make sure you’re aware of the payment terms and interest before taking the plan.
- Fees – Most Pay in 4 plans don’t charge fees unless you miss a payment. If a company charges fees for the standard buy now pay later plan it can be a red flag, or expensive depending on what they charge.
What to Think about with Buy Now Pay Later Christmas Presents
Before you use the buy now pay later plan to buy Christmas presents, consider the following:
- Are you buying only what you can afford and not spending more because you don’t have to pay for it now? Don’t go over budget.
- Make sure you’re aware of the terms. Don’t just assume it’s affordable because you can pay it off over time. Look at the payments and the terms and make sure they’re acceptable.
- Stick to your list and don’t buy anything else. It’s easy to buy anything you want because you aren’t paying for it right now. The payments will be due sooner than you think, though, so always stick to your list.
Buy now pay later Christmas presents may be just the relief you need this year. Use it wisely and only take on payments you can afford. If you use the plan correctly and pay the gifts off on time, you’ll be eligible to use the BNPL plan in the future too since a big part of the approval process relies on your past history.