A partnership between Klarna and DoorDash will allow customers to pay for food or grocery delivery using the “Pay in 4” model. This buy-now, pay-later service has become popular as it enables users to split purchases into smaller payments.
While some see this option as helpful for managing finances during tough times, others express concerns about its long-term impact. Student Ellie Cochran says she used a buy-now, pay-later plan for a big purchase and enjoys the flexibility of making four equal installments.
NerdWallet recently surveyed Americans who have used buy-now, pay-later services in the past year. The results show that 55% of respondents have used these services, but also reveal potential downsides, including regretting loans (16%), carrying multiple loans simultaneously (19%), and paying late fees or interest (19%).
Credit cards expert Sara Rathner emphasizes that using buy-now, pay-later is a form of borrowing, which can lead to financial consequences if payments are missed. Missed payments can negatively affect credit scores.
Smart shopping expert Trae Bodge believes buying now and paying later can be helpful when used responsibly, providing flexibility for budget management. He advises reserving this strategy for larger purchases and understanding the payment terms.
However, others caution against overusing buy-now, pay-later, especially for smaller purchases like low-cost fast food. To avoid regretting these purchases, it’s essential to ask questions before using buy-now, pay-later, such as whether the purchase is necessary, if the plan charges interest, and if you can cover the payments plus other expenses.
Ultimately, responsible use of buy-now, pay-later services is key. By understanding the benefits and risks involved and making informed decisions, consumers can avoid financial pitfalls.
Source: https://www.wcpo.com/money/consumer/dont-waste-your-money/buy-now-pay-later-for-fast-food-flexible-spending-option-or-a-gamble