What Are Buy Now Pay Later Catalogues?
So what exactly are buy now, pay later catalogues? These catalogues essentially allow you to purchase items but pay the total cost at a later point and often in instalments. They are also acronymically known as BNPL plans. These catalogues are especially popular, and the use of these plans has become more common in recent years.
Online advertisements have certainly played a role in this, and these sorts of ads often target younger consumers. It’s essential to be conscious of the fact that many of these ads do not highlight the issues and risks associated with buy now, pay later catalogues. We’ll discuss these cons in more detail later in the article.
Most catalogues feature a buy now, pay later option. The majority of consumers will be able to avail of a BNPL plan. However, it will depend on the catalogue and additional factors such as the credit rating of the applicant. If you have a bad credit rating or even no credit history, you may not be able to avail of many buy now, pay later catalogues.
- What Are Buy Now Pay Later Catalogues?
- How Do Buy Now Pay Later Catalogues Work?
- Benefits of Buy Now Pay Later
- Disadvantages of Buy Now, Pay Later Catalogues
- Who Offers Buy Now Pay Later Plans?
- Can I Use Buy Now Pay Later with Bad Credit?
- Considerations Before Taking Out Buy Now Pay Later Payments
How Do Buy Now Pay Later Catalogues Work?
So let’s take a look at how these payment plans actually work. In this section, we’ll consider questions such as what sort of form you may need to fill out and what the total interest might be. A buy now, pay later catalogue involves paying the total amount plus interest at a later date or dates.
While plenty of services will allow you to pay the overall amount in instalments, there are many catalogues which let you pay the full cost as a single fixed payment but at a future stage.
Usually, this will be somewhere between a fortnight after the purchase is made and one month, although it is possible to even defer payment up to as much as six to twelve months depending on the provider.
In most cases, a credit check is required, and you will need to fill out an online form before you can be approved and accepted for a buy now, pay later option. This form will ask a few different questions and will likely include a credit check. There are some catalogues buy now, pay later with no credit checks, but these are not as common.
As for the interest, this comes in the form of a representative APR, which usually lands around 25% to 40%.
As a result, a buy now, pay later catalogue is particularly suitable if you believe you will be able to meet small payments at regular intervals or will have quite a bit of more money to spare several months from now (or when the price is due) than you currently have.
With added interest and either an overall payment that will come due all at once at a later date or regular small payments, a BNPL plan will not suit everyone. You need to strongly consider how confident you are of your future finances before availing of this type of catalogue.
Benefits of Buy Now Pay Later
There are a range of pros and cons to BNPL plans. Let’s now take a look at some of the advantages.
Offers Complete Convenience
One of the main benefits of buy now, pay later catalogues UK is how convenient they are. They allow you to save on money in the short-term and pay your dues in the future.
Spread the Cost over a Few Weeks or Months
As mentioned, with these catalogues, you can often spread the overall cost over several weeks or months. If you don’t have much cash to spare right now but have a steady income with enough to spare in the long-run (factoring in the additional interest), then the use of a spread out payment catalogue could be ideal for you!
Allows You to Purchase What You Want Before Payday
Ultimately, with a buy now, pay later catalogue, you can make a purchase or several purchases without needing to pay a penny upfront. In some cases, not only will you be able to enjoy the benefits of making payments over an extended timeframe or all at once at a later point but you’ll also have the option of deferring any charges for a period of perhaps as much as six to twelve months.
Disadvantages of Buy Now, Pay Later Catalogues
Of course, there are some disadvantages to BNPL plans that you should take into account. Let’s explore some of these cons.
Charged Interest for Missed Payments
For many buy now, pay later catalogues, there are penalties if you miss a payment and this tends to come in the form of additional interest atop of the given representative APR. So it’s vital that you know you can afford these payments consistently and that your chosen payment method is set up correctly before making a purchase with this type of payment plan.
It Can Affect Your Credit Score
There is also a risk that if you fail to make payments on time, your overall credit score could be affected. However, since it is a form of credit, these catalogues can impact on your credit score regardless.
So that means that you could be paying everything on time but still see your credit score affected negatively, although this is usually unlikely.
It really depends on a range of different factors, such as how you use these catalogues and how much debt you accumulate. Overall, it’s essential to be smart when it comes to buy now, pay later catalogues.
There will still be some buy now, pay later catalogues with no credit checks to choose from but you really should avoid bad credit as much as possible as it can create problems in many walks of life.
Not Everyone is Accepted
While you will probably be successful in your application for a BNPL plan, there are no guarantees. Having no credit history or bad credit can reduce your chances of success and even if you do succeed, you may not be given as much credit as you’d like and you may be quite limited in terms of your purchase options.
Can Lead to More Serious Financial Issues
While it is unlikely, there is a risk of unpaid debt being handed over to debt collectors if it continues to go unpaid. This is not the first step that a catalogue should take if you miss a single payment (usually they will simply add extra interest).
Still, if you are really struggling to make ends meet, there is always a risk of debt and unpaid debt accumulating and becoming a bigger problem over time. So, if you have any doubts about your ability to afford these catalogues, it is best to avoid them until you are more confident of your financial security.
Budgeting is also important as this way you could still make some purchases with a BNPL option without gathering too much debt too quickly if you feel that it is safe to use these catalogues up to a certain point.
Who Offers Buy Now Pay Later Plans?
A lot of stores/companies offer BNPL plans. In this section, we’ll have a look at some popular examples. Among the top providers of buy now, pay later catalogues in the UK are ClearPay, Klarna, Laybuy, Splitit and My Argos Card. These providers often offer a store list for which their services apply.
Examples of these stores include Simply Be, JDWilliams, BooHoo, ASOS, Home Essentials, Jacamo and John Greed. You’ll find that a buy now, pay later option is available with most catalogues. These payment plans are also immensely popular. Clothing catalogues with buy now, pay later options are especially common.
Can I Use Buy Now Pay Later with Bad Credit?
One issue that can arise when applying for a BNPL service is if you have bad credit. We’ll now take a look at where you use these plans in such a scenario. Ultimately, it will depend on the provider and what exactly your credit rating is.
Some providers may be stricter than others, but in general, a credit check is commonplace when applying for these catalogues, and therefore your credit score does matter.
However, there are some spread out payment catalogues that are ideal for those with bad credit, so there will still be options for you to choose from either way.
Considerations Before Taking Out Buy Now Pay Later Payments
After looking at what buy now, pay later catalogues have to offer and weighing up their pros and cons, you may decide that a BNPL plan is perfect for you at this moment in time. However, there are still a variety of additional considerations you should take on board first.
Check for Further Benefits
Some BNPL services offer more advantages than others, so you should make sure to undertake appropriate research first. This will allow you to choose the catalogues with the most advantages as well as those that are more suitable to you.
For instance, some catalogues come with free delivery or X% or X amount of pounds off the overall cost as part of a special offer.
Are You Choosing the Best Short-term Saving Option?
Don’t forget that there are other ways to cut down on costs in the short-term. For example, if you have a credit card, this may be an easier way and ultimately a cheaper way to buy items on credit.
You may even choose to take out a small loan which would be less expensive if the loan comes with an interest rate that is less than that of the APR associated with the BNPL plan.
Most loan interest rates, in fact, land around 10%, which is significantly less than the 25-40% range offered by most BNPL services.
Obviously, you need to consider how the use of your credit card or a loan might affect your credit rating and whether the hassle involved is worthwhile when compared with using a buy now, pay later catalogue.
So, all in all, it’s important that you weigh up a range of variables before deciding whether any of these alternative options are actually a better choice for you.
Minimum Purchase Amount
Most buy now, pay later catalogues require that you spend a certain amount as a minimum. In most cases, this will usually be around £50. However, you may even find catalogues which let you make a purchase of as little as £10 and then pay the actual cost plus interest at a later date.
Track Your Payments
You should definitely keep a record of your various BNPL purchases. Failure to do so may leave you unsure as to how much you owe, when exactly money will be coming out of your accounts and when you’ll have paid up all of the debt owed due to these catalogues.
So just take a note of each payment and its relevant details somewhere, make a copy/back up the file and that way you’ll be able to keep on top of your buy now, pay later expenses!
In this article, we’ve considered what buy now, pay later catalogues entail, their pros and cons and additional sub-topics such as whether you can avail of a BNPL service with bad credit.
We’ve looked at how these can be used to cut down on short-term expenses although we’ve also discussed how you will pay more in the long-run because of interest.
As with any payment plan, it’s essential that you consider the various factors, benefits and disadvantages of a catalogue before making a purchase with one. Now, that you are informed and if you feel that a buy now, pay later catalogue is a good idea, it’s time to find ones that suit you!
Q: How do you apply for a buy now, pay later catalogues?
A: You can apply either via store websites for those who offer a buy now, pay later option or through a BNPL service and then choose a suitable store/company from the list provided by said service. You will then need to fill out a form which will usually include a credit check.
Q: Is buy now, pay later a good idea?
A: It really depends on your financial situation both in the present and what you expect it to be in the mid to long-term. If you don’t have much cash to spare right now but can afford smaller weekly or monthly payments in the future, then you should consider using buy now, pay later catalogues.
However, you should also consider whether using a credit card or taking out a loan might be an easier and more affordable option for you overall.
Q: How often do you need to pay when using a buy now, pay later catalogue?
A: Most BNPL services allow you to pay on a weekly or monthly basis. In some cases, you’ll be allowed to pay the entire amount as one fixed payment but many weeks or months after making a purchase.
Q: What is the interest rate of a buy now, pay later catalogue?
A: In the majority of cases, you’ll be looking at an interest rate of between 25% and 40% when it comes to a buy now, pay later catalogue.
Q: Can a buy now, pay later catalogue affect your credit score?
A: Yes, it can, particularly if you miss any payments.