BUY NOW, PAY LATER
Do you often opt for ‘BUY NOW, PAY LATER OPTION’?
Today, when you hang around for shopping or visit any ‘online shopping site’ you will find many offers to buy gadgets, home appliances, other electronic products along with many other items with ‘ BUY NOW, PAY LATER ‘ option!
Items like gadgets, appliances like washing machine do come with heavy price to pay. On the other hand, it is on the mind of every single household to have best of them at home & for personal use.
Paying this hefty price at one go while sacrificing other needs is often not affordable.
So, such offers & arrangements are of good help for shoppers!
Festivals, special occasions trigger demand for such purchases & when you have this offer in hand, one can easily think to grab it.
As per the data, from a survey by a firm ‘Experian’ in the year 2022, ‘Buy Now, Pay Later’ transactions in India surged by 21% in H1 in the year 2022.
This is 3% more than ‘global growth’ numbers!
Let’s know the reason behind popularity of such scheme’s options:
- Ease & convenience:
When a person opts for such option to purchase an item, it is easy to opt. They have simple process to register & convenient payment terms.
When you get the item, you want & have a time period in hand to pay off the dues, one convincedly opts for such option if available.
- Instant gratification:
Though items like gadgets, appliances come with high cost, they are many a times essential items in the house.
Often people, instead of looking at it as a ‘NEED’, treat them as a ‘status symbol’. Peer competition also adds to the list of reasons.
So, to get ‘instant gratification’, one opts for such offers to buy what they want.
- Give us opportunity to buy something which we can’t afford at one go:
With option like ‘buy now, pay later’, we get the opportunity to buy something which we can’t afford to buy by paying its full price at one go.
- Credit score:
When some one opts for such offers & pays the dues on time, it can give boost to get good credit score for the one.
But, remember, how much ever ‘happy feeling’ such offer may give you to purchase what you want, if you end up with non-dues, then you will need to pay 20%-25% additional cost as additional fees for the same.
Along with this, following are the reasons one should stay away from ‘buy now, pay later’ options-
BUY NOW, PAY LATER Stay away list –
- Impulse buying:
When you have option to ‘pay later’ for something, you can easily opt to buy now! This often triggers ‘impulse buying’. Many a times, people just visit a mall to stroll around or to buy something they need & end up buying ‘what they want’ by using such offers.
Gone are the days, when people used to save little every month to purchase expensive items for home or for their own use.
- Less liquidity:
While managing own money, people should focus on enough liquidity with them along with thoughtful investments.
At one time, to buy something expensive, we used to look at our pockets. But, with ‘buy now, pay later’ option, the need is less!
Its true that, while buying the item, you don’t need to pay full price, but to pay it later’, you lose on the same liquidity in hand.
When someone buys items in a series by opting for such options, he/she ends up with no or less liquidity in hand.
- Can fall in a trap of short-term loans:
I remember the stories; my parents share about the ‘loan applications’ & tedious process to get loans in their times! Now, short term loans like these are easy & available.
We, as human beings, always wants things to go easy. So, naturally, we get inclined to offers which help us to buy items we want, pay later as per our convenience. One after another, a person can easily buy almost all items from his wish list with the help of it.
So much so that, in a greed to ‘buy what we want’ , we may end up in a trap of such short term loans.
This hampers our ‘finances’ because essential things like taking right life insurance, creating own emergency fund, investing for future goals, etc often take a back seat.
So, dear shoppers, ‘Be mindful when you shop & spend .. Be thoughtful when you invest’!
Offers like ‘buy now, pay later’ are for our convenience, Please do not ‘ make it a way you always purchase with’.
Happy shopping!
Contact ARTHA FinPlan for more details.