Debunking myths about buy now pay later

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When you’re looking to buy something online or on the high street, it’s often easier to make regular payments over a longer period, rather than paying for everything all at once.

 

We’re all familiar with the idea of using a mortgage to buy a house or taking out a loan for a new car and paying it back over a few years. Today, people are using the same approach to buy a much wider range of things, whether that’s home furnishings, art, electrical gadgets or sports equipment.

 

Is buy now pay later a good idea?

For a lot of people, spreading the cost over a number of payments makes it easier for them to manage their money. As with anything new, however, it’s natural to have questions about how everything works, and whether buy now, pay later is right for you.

 

In this blog, we’ll answer some common questions people have about buying on finance, and how our interest free credit platform works.

 

Is using buy now, pay later more expensive?

It can be if you’re not careful. Some providers will charge you interest on their buy now pay later deals, meaning you’ll end up spending more than if you paid all at once. They may also charge you an admin or processing fee.

 

This isn’t how DivideBuy works, however. With our interest free finance facility, there are no hidden costs, and no interest is payable. So, if you buy something that costs £500, that’s what you’ll pay. We give you the option of making repayments over a set number of months to suit your budget. We’ll also outline the repayment schedule in plain, clear language right at the outset, so you can see how much you need to repay every month. And don’t worry about forgetting payments – we’ll take them automatically on the agreed date.

 

Will using buy now pay later impact my credit score?

Some people wonder whether using buy now pay later will negatively affect their credit score.

 

To help give you confidence about your decisions, some of our partner retailers now offer the option of a soft credit search. To do this, we’ll use our technology give you a good idea of whether you’d be eligible for our interest free credit facility before you apply. This doesn’t leave any footprint on your credit file.

 

Can I use buy now, pay later without a credit check?

It’s not possible to use buy now pay later with no credit check. A soft credit check, however, lets you see how a hard credit check is likely to go. If you choose not to go ahead with your interest free credit purchase after this, your credit score won’t be negatively affected.

 

We have a 90% acceptance rate and, depending on your circumstances, multiple acceptance routes to help you access our finance – such as using a guarantor, or paying an initial deposit that reduces future monthly payments.

 

Are interest free credit and buy now, pay later solutions just for the younger generations?

It’s easy to assume the explosive growth of alternative ways to pay is solely down to young people, but that’s not the case.  Instead, it’s also being embraced by the older generations – albeit in slightly more modest numbers. According to our own figures, payment solutions like ours are used by around one in three Gen X shoppers, and nearly one in five baby boomers (the generation aged from their late 50s to late 60s).

We’ve found that solutions like interest free credit are offering new opportunities to retailers across many sectors, including home improvement, which often has much higher average order values. That means demographics with high-income professionals are looking for interest free credit in high-value markets. Research from 365 Retail found Gen Xers are more likely to use services like these for tech, while baby boomers prefer to pay later for homeware equipment.

 

Can I pay off my account early?

Yes, with our services, you are in total control of your finances. Whether you want to clear the full balance or just make a one-off additional payment, it’s flexible to suit you. On the other hand, if you prefer to stick to your current payment schedule, that’s completely fine, too.

 

How can I keep track of my payments?

In your online account with us, you can keep track of your payments, download an invoice, view your credit agreement, change your card details or make a payment whenever you like.

 

So, will I benefit from buy now pay later?

When you first consider a new way of buying things, it’s sensible to ask plenty of questions. The key thing to remember is that not all buy now pay later deals are the same.

 

If a provider wants to charge interest or isn’t clear about what you’ll pay and when, then it’s only natural that you’ll have some doubts. With our interest free credit option, however, many people find that paying in monthly instalments can help them manage their spending more effectively.

 

We’re open about how our interest free credit facility operates, giving you peace of mind about your decisions. Learn more about our interest free credit platform, or browse the directory of partner retailers where you can use our interest free payment method.

 

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