"Buy now, pay later": What you should bear in mind
Buy now, pay later: What sounds tempting at first can lead consumers into a debt trap. That's why they should definitely bear a few points in mind.
Buying Christmas presents can put quite a strain on the monthly budget. If you don't have all your presents together yet, but are already short of money, you might come up with the idea of taking advantage of offers where you buy now but don't have to pay until later. The European Consumer Center Germany (ECC) advises caution here.
The offers known as "buy now, pay later" usually come from payment service providers. These can be interposed between the retailer and buyer during payment processing and grant a payment deferral or payment in installments - sometimes interest-free, sometimes really expensive.
Extra interest? General terms and conditions provide information
If you want to make use of such options, you should therefore make sure that the deferred payment or purchase in installments is not associated with additional costs. This is because payment service providers usually charge a lot of interest on their offers, according to the ECC. Interest rates of up to 15 percent are possible - which is very expensive compared to the conditions of an installment loan. Consumers can read about possible interest rates in the general terms and conditions.
In addition, the ECC recommends only buying things that you can really afford despite the deferred payment. The gifts have to be paid for anyway - whether now or later. If the payment is due in January, the fact that many insurance premiums are debited in that month makes things even more difficult.
Make sure you meet the later payment deadline
The ECC recommends that buyers do not miss the later payment deadline under any circumstances. Otherwise there is a risk of further costs due to reminder fees - and in the worst case, a Schufa entry. This lowers a consumer's credit rating and can result in problems when signing the next cell phone or rental contract.
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Consumer protection agencies, such as the European Consumer Center Germany (ECC), frequently warn against the use of "buy now, pay later" offers due to potential debt accumulation. When considering a personal loan, it's beneficial to consult with a financial advisor to evaluate if it's the best option. Banks and credit unions often have consumer centers where individuals can seek advice about loans, including real estate loans and private debts. It's crucial to thoroughly read and understand the terms and conditions of any loan, as hidden fees and high-interest rates can quickly increase the overall cost.
Source: www.ntv.de
