Americans have grown fond of 'buy now, pay later' services. Here's what you should know about the rapidly growing industry.
By KEN SWEET, AP Business Writer NEW YORK — Americans have grown fond of"buy now, pay later" services, but the"pay later" part is becoming increasingly difficult for some borrowers.
Given those features, consumer advocates and financial advisors initially had seen buy now, pay later plans as a potentially healthier form of consumer debt if used correctly. The biggest concern had been late fees, which could act as a hefty finance charge on a small purchase if a borrower is late on a payment. The fees can run as high as $34, plus interest.
Q: Are my purchases protected? Answer: In the U.S., buy now, pay later services are not currently covered by the Truth in Lending Act, which regulates credit cards and other types of loans . Q: What are the other risks? Answer: Because there's no centralized reporting of buy now, pay later purchases, those debts won't necessarily appear on your credit profile with major credit rating agencies.
Q: Why do retailers offer buy now, pay later? Answer: Retailers accept the backend fees of buy now, pay later services because the products increase cart sizes. When shoppers are given the option to pay off purchases in installments, they're more likely to buy more goods in one go.
Argentina Últimas Noticias, Argentina Titulares
Similar News:También puedes leer noticias similares a ésta que hemos recopilado de otras fuentes de noticias.
As 'buy now, pay later' plans grow, so do delinquenciesNEW YORK (AP) — Americans have grown fond of “buy now, pay later” services, but the “pay later” part is becoming increasingly difficult for some borrowers. Buy now, pay later loans allow users to pay for items such new sneakers, electronics, or luxury goods in installments.
Leer más »
As 'buy now, pay later' plans grow, so do delinquenciesBuy now, pay later loans allow users to pay for items such new sneakers, electronics, or luxury goods in installments. Companies such as Affirm, Afterpay, Klarna and PayPal have built popular financial products around these short-term loans, particularly for younger borrowers, who are fearful of never-ending credit card debt. “You have an industry with a higher concentration of subprime borrowers in a market that hasn’t been effectively tested through (this type of economy), and you have a kind of a toxic brew of concerns,” said Michael Taiano, an analyst with Fitch Ratings, who co-wrote a report in July highlighting some of the concerns with the industry.
Leer más »
As 'buy now, pay later' plans grow, so do delinquenciesA growing number of American shoppers have jumped at the chance to use “buy now, pay later” loans to pay for new sneakers, electronics, or luxury goods in installments.
Leer más »
As 'buy now, pay later' plans grow, so do delinquenciesAmericans have grown fond of 'buy now, pay later' services. Here's what you should know about the rapidly growing industry.
Leer más »
As 'buy now, pay later' plans grow, so do delinquenciesA growing number of American shoppers have jumped at the chance to use “buy now, pay later” loans to pay for new sneakers, electronics, or luxury goods in installments
Leer más »