Debunking myths about buy now pay later

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 solutions work.

Is using buy now, pay later more expensive?

It can be over time, depending on whether you choose interest free or interest bearing credit.

With our interest free finance facility, there’s no additional borrowing costs. 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.

Our interest free and interest bearing credit products can be spread from 3-60 months depending on the retailer you’re purchasing from.

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, our partner retailers offer the option of a soft credit search. To do this, we’ll use our technology to 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 credit purchase after this, your credit score won’t be negatively affected.

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 retail finance 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 retail fiannce 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.

With some, you’ll pay interest. However, these deals often come with longer repayment periods, whereas most interest free credit is usually 12 months or less. However, DivideBuy’s interest free finance options can be spread up to 36 months, and our interest bearing finance up to 60 months, helping you to manage your budget.

Learn more about our finance solutions or browse the directory of partner retailers where you can use our credit options.