June 17
Category: Playbook
The Hidden Cost of “Buy Now, Pay Later”
“Buy now, pay later.” It’s a tempting offer. Some merchants let you take home items now and charge your credit card later. This is often called the “Bill Me Later” option.
It may sound convenient—but don’t be fooled. As your Credit Coach, we must warn you: this is a financial sand trap.
Why It Hurts More Than It Helps
This type of purchase can push you to spend more than you can actually afford. Later, when the charge finally appears, your credit card balance may be much higher than expected.
A delayed charge can even push your balance over the limit. If that happens, your credit score will likely drop. Not only that, but your card issuer might hit you with an “over-the-limit” fee. This extra cost increases your minimum payment, making it harder to keep up. And if you miss the correct amount, you risk a 30-day late mark on your report.
No Mulligans in Credit
Your credit card won’t give you a do-over. That’s why you need to play smart. If you can’t afford the item today, wait. You’ll be better off holding off on those new golf clubs for a few months than dealing with long-term credit damage.
Offensive Tip
Keep a record of all your credit card numbers. Include their expiration dates and the customer service phone numbers. This way, if your cards are lost or stolen, you can act fast. Staying prepared is a winning strategy!