hi everyone welcome back to calkin media i'm rosie jacobs and thanks again for tuning in
in this video we're going to be talking about the pros and cons of
buy now pay later schemes before we get into it be sure to press that bell icon
at the bottom of the screen and stay on top of all the latest updates
so we're looking at how you can buy into buy now pay later schemes and how they can
create actual serious debt issues when it comes to the festive season most companies and retailers
opt for various ways to lure people to spend spend and spend again but many experts have said that
schemes like shop now pay later can create a huge mess of personal debt as many have no clue how it
actually works but what exactly is bnpl let's find out by now pay later is basically a kind
of short-term financing scheme which functions like an interest-free loan that needs to be
paid back in regular installments this arrangement of payment has many advantages for consumers the
payments for your purchases are made automatically through the bnpl provider you've opted for
which happens to be very convenient for consumers the amount borrowed from bnpl providers
is mostly interest-free although there is a late fee chargeable for delayed payments the
total amount to be paid is divided equally into regular installments by your bnpl provider and is
automatically debited from your account a late fee is charged only if your account has insufficient
balance to make that payment on time so bnpl works as an alternative for credit cards however not
everything is as rosy as it seems and this payment arrangement has certain disadvantages also one of
the major drawbacks of this arrangement is that it encourages impulse spending as the payment can
be made at a later date and people may buy things that they don't even need for the time being also
unlike credit card payments the date of payment to bnpl providers isn't chosen by the consumer
although credit checks aren't used on bnpl platforms the credit scores of consumers may still
get impacted as lenders barclay's new report on bnpl suggests that a lot of issues are being faced
by consumers with two out of every five consumers still not clear about what they're signing up for
the outcome of not being able to repay on time is still not understood by 36 of bnpl customers
around half of the 20 of the uk adults who have been using these arrangements are shopping for
christmas this year using this payment mechanism the option of allowing customers to make interest
free payments in 30 days is being offered by many companies like clearpay clarner and lay by
more retailers like smarts and spencer h m asos and jd sports have also joined the club
however with the continuous increase in shopping debts across the uk the concerns regarding bnpl
arrangements is growing therefore shoppers must clearly know about the consequences of missing
out on their repayment commitments and they must be aware about the arrangements beforehand
to avoid any unnecessary financial burden in the future they need to be educated about the
method of payment that they're signing up for and that's a wrap for now but if
you have enjoyed this video then please feel free to like share subscribe or comment and
go to the website kalkinemedia.com for all the latest i'm rose jacobs i'll see you next time