Why You Shouldn’t Use ‘Buy Now, Pay Later’ for Your Prime Day Purchases

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The next Amazon Prime day – or at least the first -rate autumn event known as “Prime Big Days” – will take place from October 7 to 8. While you check All the best offersYou might be tempted by Amazon’s “Affordable Monthly Payment System”. Also known as “Buy now, pay later” (BNPL), its argument is attractive: buy what I need now, and pay later, “on your own calendar”. But as practical as it may seem, you should think twice before using the purchase now, pay the subsequent options for the prime day.

Although the BNPL plans can allow you to pay for purchases in interest -free payments, they have a cost that can easily prevail over the first -rate discounts. Let’s take a look at the hidden costs of the BNPL, and why would you better pay in advance for all your first day offers.

How do Amazon buy now, pay the subsequent options work?

Amazon does not really have its own purchase program now, pay the subsequent program. Instead, they have joined the BNPL supplier Major Affirm. When you check on Amazon, you can select assert as payment. The process is simple: you choose your items, select Affirm at the checkout, fill out a quick request and receive an instant decision on the conditions of your loan. Individual transactions initiated by Affirm are limited to $ 25,000, with a daily maximum of $ 100,000 on several purchases, but we hope that it will not appear in a single first day madness, right? (RIGHT?!))

The main draw of these programs is the ability to “pay at your own pace”. If you have to pay a deposit, this is due at the time of the transaction. From there, your first monthly payment is generally due one month after the treatment of your purchase. Each next payment will be due a month later, the same day of the month.

You can choose your own calendar, generally covering 3, 6, 12 or 24 months, depending on the amount of the purchase and your solvency. Unlike traditional credit cards, Affirm shows you the exact payment amount and the total cost in advance, and does not claim any hidden costs or compound interest. (More things about it below.)

Of course, you need a separate affirmation account in addition to your Amazon Prime subscription. The request process requires basic information, including your name, mobile phone number, date of birth and the last four figures for your social security number. Assimir performs a gentle credit verification initially, which has no impact on your credit scoring, although they can carry out a difficult investigation for certain loans.

Now take a look at four major risks to consider before touching this BNPL button:

This facilitates impulsive expenses

The ease of this type of financing can make costly purchases more affordable than they really are. When you can buy a tablet of $ 999.99 for “only $ 67 per month”, it is easy to lose sight of the total cost, as well as your overall financial image. In turn, it makes it too easy to spend too much on the items that you may not have bought otherwise. You better breathe, get away from your basket and set alerts to warn when a product reaches a price that you can work.

You can be affected by unexpected interests of interest

The greatest danger with BNPL is missing one of the recurring payments. Of course, the plans are marketed as an interest -free financing. However, in many cases, this interest offer of 0% only applies if you reimburse the full balance on the specific due date. So the buyer is wary – it is easy to inadvertently ending up with significant interest costs if you are not vigilant to reimburse the balance before the end of the promotional period. Soon, this great day affair at a reduced price will not be as affordable.

This may have an impact on your credit scoring

Since this summer, BNPL purchases can now assign your credit scoring. So, if you miss payments or default defects on the payment plan, this will cause damage to your credit score, which makes it even more difficult to be approved for mortgages, car loans, credit cards and other funding along the way. None of these risks are worth the savings of the first day.

You will have limited purchase protection protections

When you use a credit card, you get valuable purchase protections such as extended warranty coverage, price protection and the possibility of challenging fraudulent costs. BNPL plans are generally not delivered with these guarantees. This means that you are on the hook if something is wrong with your first day purchase and that the retailer does not do things correctly. The smarter move is to buy what you can afford during the Amazon Prime Day event, no matter how tempting these offers.

Although the payment plans are useful if you really need to finance something major, it is best to avoid taking debt for daily expenses. Better to wait for a good price for something you really need and you can afford to pay for the moment. To this end, continue to check the coverage of Lifehacker’s first order day to find the best offers available during the sales event this fall.