Berlin. “Buy now, pay later” – This popular payment method can become a cost trap, especially for people with low incomes.
Quickly order clothes from Zara without any money online, buy a new TV from Media Markt and get furniture from Ikea at the same time – “Buy Now Pay Later” make it possible. Consumers buy from it Products on the Internet and pay later.
The advantages are obvious: The Cost The costs for the purchase are not incurred at the beginning, but can be paid within a certain period of time or spread over several months in installments. This means that the customer is relatively flexible and larger purchases can be purchased on credit.
Providers like Klarna are very popular with young adults
The “buy now, pay later” method is particularly popular with young adults because they generally have lower incomes. This is also reflected in the results of Schufa’s new risk and credit compass. Because the results show that in the database the Schufa There were around 3.8 million small loans under 1000 euros (2022) – around 1.8 million more than in the previous year. Almost half (42.6 percent) of all newly concluded loans were for less than 1,000 euros. “Buy Now Pay Later” offers, which are particularly used by young adults, drove the growth in small loans. “Buy Now Pay Later” offers are therefore on the rise in the lending business.
This is what Buy Now Pay Later means
The “Buy Now Pay Later” payment method used, for example, by payment providers such as Klarna, Paypal and Amazon is actually not a new type of pay. Rather, there are two well-known payment methods behind it: purchase on account and installment purchase.
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Purchasing on account is still very popular among Germans. That’s no wonder, because the customer only has to pay for the goods within 14 to 30 days after they have been shipped. The advantage: The customer has to agree Money Don’t chase after the goods, for example if they haven’t been shipped or are damaged.
The risk therefore lies not with the buyer, but with the seller. It’s especially noisy if the customer doesn’t know the shop or doesn’t know whether he wants to keep the goods Money guide financial tip It is advisable to pay for your purchase on account. Especially since purchasing on account is free anyway. But be careful: you shouldn’t buy too many goods from different shops, even by invoice. Otherwise, the overview of due payments can easily be lost and left open bills can be expensive.
Finanztip advises against interest-bearing installment purchases
With installment purchase, on the other hand, the goods are delivered and gradually paid off by the customer. However, in contrast to purchasing on account, these often fall Interest charges at. How high the interest rate is depends on the respective provider. For example, the customer pays an effective annual interest rate of 14.79 percent at Klarna, 11.99 percent at Paypal and 11.49 percent at Amazon (Amazon Pay).
However, Finanztip advises against purchasing consumer goods such as televisions or clothing through an interest-bearing loan Installment purchase finance. The interest rates are often too high and can overburden the customer financially if they make multiple installment purchases. However, if there is no money and, for example, a refrigerator or oven needs to be replaced promptly, then you could Line of credit or Installment loans to be interesting.
Framework and installment loans are often the better alternative
For larger purchases, the customer should compare the conditions of the installment purchases offered with those of line of credit and installment loans. At the Framework credit The bank grants a sum of money as a credit line that can be accessed at any time. Interest is only paid on the amount paid out. This loan is particularly useful for consumers who expect to have a large amount of money in their account in the near future. The interest rates are usually lower than with an interest-bearing installment purchase, but higher than with an installment loan.
Installment loans work the same way Installment purchases, but are significantly cheaper. However, the conclusion is more time-consuming than with an installment purchase. So if you have enough time, you should get various offers via the loan portals. But the same applies to credit lines and installment loans: postponed does not mean canceled.
This article is published in cooperation with finanztip.de. The money guide for consumers is part of the Finanztip Foundation.