- So earlier this week on black Twitter,
the timeline went into chaos
when people started to talk about
book now pay later options for flights,
and I was just there reading my timeline.
So what brought about this chaos on the timeline this week?
So this is the tweet that started it earlier this week,
and it comes from Klarna, which if you aren't familiar,
it is a buy now pay later option,
and they tweeted
"Us on our way to the airport after buying
flights with Klarna."
And it turned out to be like a division
between those who turn their nose up against
buy now pay later payment plans for flights,
and there were some people who didn't know about it.
There are some people who were just like, you know,
ecstatic about it,
at underscore big O underscore tweets,
"Flights taken Klarna? I'll see y'all in Dubai,"
and so forth.
These tweets ensued.
"Me at JFK after booking my world tour using Klarna."
And since this came about earlier this week,
it had me thinking like, what is, you know,
all the hoopla about all of a sudden?
I've always known about, you know,
book now pay later options,
but I wanted to talk to you about really quickly,
what are some book now pay later options
for travel and for flights?
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Some options include Klarna, Affirm,
PayPal Credit and Afterpay.
And this is just looking at some providers,
a few, that do a book now pay later options,
and it really depends on what the airline accepts.
Most of the airlines I've seen take majority
of PayPal Credit, and then you can use Klarna app to pay
for some of the travels and some of the flights.
On Klarna, on the app, you can basically make purchases
on the app and use a one-time card.
They also partner, Klarna also partners
with Expedia to allow you to be able to make purchases.
So I downloaded the app and how it works is that
you are able to add a one-time card
that lets you split your purchase
into smaller payments at any online store.
So this is an example of when I clicked on
Expedia was already loaded into the app,
and I chose a flight,
as you can see at the top,
and basically when you're ready to pay,
you create a one-time card,
and then you choose any of your payment methods.
You can even choose a travel credit card,
or an American Express or a regular credit card,
and then select to pay by credit card,
and use your one-time card.
So with these options, you have to have a minimum
of a hundred dollars.
They all work in a similar fashion.
You're able to split payments over about usually six months.
Similar with all of these methods,
the interest doesn't kick in
until like the six-month period is over,
and if you don't pay your balance by that six months,
the end of the six months,
you have to basically pay the interest,
and it goes all the way back to the beginning
of when you basically made the purchase.
With Afterpay, you have to pay like a fee if you're late.
So it just depends.
I would encourage you to look at which options there are,
and consider that before you jump on it.
I know it's very tempting to like see that flight deal,
and want to jump on it, but you have to kind of
consider the pros and cons.
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If you do not want to use Klarna,
one thing that's been around for at least a while
on American express is a plan it option,
and you're basically able to make that purchase
on your American Express,
and you break the payments up on that large purchase
over several months and you are charged a fee based
on how much the purchase is and other different factors.
And Chase actually started the My Chase plan in 2020,
so that's another option.
So you have to kind of consider
do I want to do a buy now pay later,
or if you already have one of these credit cards,
consider doing a plan with your credit card
since you already have history with that credit card issuer.
So, these are just the two that I know of.
You definitely want to check with your credit card issuer
if you want to see if there is a plan available to you.
Like I mentioned before,
you definitely want to pay attention
to the fees and to like the interest rate.
The APR, the annual percentage rate on Klarna is 19.99%
at the time of this video,
and the promotional period I mentioned
earlier is six months,
so you have to pay that balance
off in six months, at the end of the six months,
you'll be charged 19.99% against that balance,
but going to the original purchase.
PayPal Credit is an option.
It is 23.99%, and it also has
a six month promotional period.
PayPal Credit is actually an option I saw
on most of the websites.
Went through the checkout process, tested it out on Delta,
and of course you can always pay
with your Delta Amex or any other credit card,
but if you would like to use PayPal Credit,
there is an option to basically be redirected to PayPal,
and towards the bottom it says,
"PayPal Credit is now available through your PayPal wallet."
PayPal Credit, which is basically no interest
in six months and subject to credit affordable.
And also I went through the process with Southwest.
It basically has it so that when you check out as well,
you just toggle to the right of the credit card,
debit card option,
and click purchase with PayPal,
and you'll be directed to PayPal
and you can choose the PayPal Credit option.
Keep in mind, as all of these options
are subject to credit approval.
Understand that it's going to pull your credit,
and credit history, and what you're approved
for and things would depend on that,
so that's what any of these options that you use.
Okay, so back to the interest rates and fees.
Amex Travel credit card, if you were to use that,
or any Amex, but I would prefer to use a travel credit card,
so that I can basically get bonus points
for purchasing on an Amex travel credit card.
But, I mentioned earlier that Amex,
American Express has the plan it option.
There's not an interest fee,
but they charge a monthly plan fee,
which is 0.61% to 1.17% of the purchase.
The duration depends on a few factors,
depending on your credit and things like that.
I will show you that American Express has a
plan it calculator, so you can go ahead
and see what that would look like if you were to do it.
So, let's just say you purchased a $600 flight
out of the country and you're using the American Express,
and you want to break it down into six payments.
It shows you that you're going to be making a payment
of $104.98 for six payments,
and 4.98 for each payment,
so your total cost is, you know,
if you pay it in six months,
you're only paying $29.88 above the original cost.
If you were to break it even more
further down into 12 months, you see the increase
of $60.12 more than the initial $600,
and $90 if you break it into 18 months,
but this is just an example,
and if you pay early,
you're not going to still be, you know,
responsible for these fees.
So this is a way I really liked
that you can do this calculator to kind of determine,
and then going back, Chase has
the My Chase plan is new, it started in 2020,
and when I went to the website,
it was very vague on what the actual APR would be,
or what the actual monthly fee would be.
It was just saying that it's based
on the amount and the duration of the plan,
and you can plan anywhere from three to 18 months.
So, basically what I'm telling you is to
compare the interest rates, any late fees,
any monthly fees, and look at how long the period
is for you to be able to pay that off.
This is not an all-inclusive list
of how you can book now pay later flights,
because you can go directly
to like booking.com, expedia.com, you can go directly,
a lot of these companies are offering book now pay later
flights because what a year we've had
with being able to travel.
So, this is a way to encourage people to get back out there,
but I would encourage you to basically,
you know, be responsible, think smart about it,
and to not get into any unnecessary debt
than you need to, it's not worth it.
Here are some of my thoughts on book now pay later flights,
and using some of these methods.
With Klarna, pro is that you do not have
a hard pull on your credit.
There's a soft pull, but they do of course check your
credit background to see what you're eligible for.
PayPal Credit has a hard pull,
and also a high APR, which I mentioned earlier,
was roughly around 23.99%, that's high.
Credit cards, on the other hand,
if you decided to use Klarna,
and then use your credit card,
you still have that high APR.
But if you decided to use the credit card to
use a plan method, which I mentioned earlier,
the APR doesn't really factor in,
unless you miss that payment plan.
Cards do have a high APR of anywhere
from 15.99% to 22.99%,
and understand this,
these rates may be one thing at this time,
but these companies have the right to,
at any time, raise the APR.
Buy now pay later methods penalize you
for not paying the full balance in the promotional period,
and if you miss payments.
You know, if you're using Klarna or any of these,
and you're using directly like your bank card,
I kind of prefer the security that comes with credit card.
I reviewed PayPal Credit,
and it stated like if you suspect fraud or anything,
like you have to call this number,
versus American Express is really on it.
I have had issues with going through my bank
and it's a lot more challenging to,
if there's an issue or a fraud or something,
sometimes it was a lot more challenging
than just opening a case really quickly
on my American Express app or online.
And also when I buy flights on credit cards,
there is a built in kind of insurance,
it's limited, but it's some built-in insurance
for the flights that I purchased.
But at the end of the day, I really use travel insurance,
I'll link what I use for my travel insurance,
because it protects my electronics
and it protects just like if I were to get sick, God forbid.
And if you're comparing it with Klarna or Afterpay or Affirm
versus using a travel credit card,
travel credit cards have an annual fee
at the bare minimum or 99,
but there are some travel credit cards
that do not have a fee.
I'll link in the description of this video
my favorite travel credit cards that I've been
able to like benefit from the most.
I just wanted to compare what you have available
for buy now pay later flights, book now pay later flights.
I wanted to kind of talk about that,
'cause it was very interesting that this came
about on Twitter this week when it's been around for awhile.
I think though,
everyone's just ready to get back out there and travel.
Let me know which method you use,
and, these are just the things to be aware of.
I wanted you to know about
the two different methods,
going directly with the travel credit card
versus using a buy now pay later option,
and definitely be careful when considering all,
look at all the pros and cons, look at the-
Actually click the link and read the terms and fees
too so that you don't get bamboozled,
and I'm gonna do a video on how you can find,
you know, cheap flights so that you may not have
to use this book now pay later option.
So definitely stay tuned and subscribe
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