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A Shopping Guide: What Does the 'Buy Now Pay Later' Option Mean?

What Does the 'Buy Now Pay Later' Option Mean?
With the multitude of online shopping sites, consumers have the option of making their purchases and paying within a stipulated period, instead of an immediate payment. Through the Buzzle article below, you will understand what the 'Buy now pay later' option means.
Kashmira Lad
Quick Fact:
The 'Buy now pay later' option is available only on certain credit terms. The interest rate offered will depend on your account.
You would find hardly a minuscule percentage of people who are a novice to shopping. While shopping is quite a necessity (for groceries, clothes, etc.), it has now become an addiction for many. Traditional shopping requires you to shop for your necessities (or luxuries) and pay the bills at the counter. Off late, people prefer online shopping for a variety of reasons. Have you encountered a situation where you might have wanted to desperately buy something (a dress, watch, shoes, bags, anything), but were short of cash? This situation does not occur when you shop online, and this is facilitated by the 'buy now pay later' option, which in a nutshell, gives you an extension for payment.
Buy Now, Pay Later (BNPL)
  • This option is actually available with PayPal, though it is used by many other sites as well.
  • It basically offers you a credit extension on whatever you have purchased.
  • The period for which the payment is deferred varies with different online solutions.
  • For example, you can shop for whatever stuff you wish to, then select the 'buy now pay later' option, and get a period extension. If your extension is 6 months, you do not have to pay anything for 6 months. After this period culminates, you have an option to extend the period further, or make the payment.
  • This option works brilliantly if you need to make an urgent purchase, but do not have sufficient funds (period) to do so.
Points to Remember
Selected Items
  • The option of paying later is available only with selected items, i.e., you might shop for a variety of stuff - furniture, books, clothes, accessories, home d├ęcor, etc. But this feature may not be applicable on all these purchases.
  • Therefore, if you are short of funds and wish to buy something using this option as a backup, make sure to verify that it covers the item you intend to shop for.
  • You need to have an options account to avail this scheme.
  • You will find the choice to open this account on the homepage of the official website. This is what enables you to choose the BNPL.
  • Accordingly, for a particular purchase amount, you are allowed to defer your payment. Depending on your credit status, you will be provided credit.
  • You can keep aside your worries regarding the online payment or related topics. This option is fast, easy, and is equipped with all the essential online security.
  • Of course, the protection offered varies from one site to another. In general though, companies make sure that their customers are not subject to online fraud or harassment.
Cost Extension
  • This varies with the chosen payment option. A period extension is generally between 6 to 12 months.
  • At the end of this period, you will be required to pay the entire amount.
  • However, if you still short of funds (or any other reason), you have the option of extending this cost for a further period of time, depending on your account status.
  • That said, bear in mind that it is mandatory to pay a minimum amount for prior to cost extension.
Credit Limit
  • Payment solutions have the option of offering credit to the account.
  • Depending on the terms and conditions of the website, interest is accrued beginning from the date of order.
  • This is generally not displayed until the end of the deferred period, which begins the moment the order is placed (even if it has not been dispatched yet).
  • You can pay the price before the period expiry to avoid interest.
  • Your credit limit is set by the website; however, this is not the actual credit limit.
  • The actual one depends on your credit status, which will have a good status if you have made the payments prior to the expiry of the deferred period.
Most of the stores, even insurance and similar business websites prefer the BNPL option (or similar options). Some even offer a discount with this option at the checkout. The process is fast and convenient and enables people to conduct their shopping in a hassle-free manner. Do not over-shoot the budget though, or else you will have to make an advanced payment, not to mention, you are bound to secure a poor credit status.
The 'buy now pay later' option surely is convenient in most of the aspects. Use the option in a very sensible and disciplined manner to enjoy the benefits. Have fun whilst you shop! Cheerio!