Gotta have it now, but don’t have the cash? Why not buy now, and pay later? (BNPL). It’s the perfect way for you to get that thing you want even if your wallet is practically empty, right?
Maybe.
Or maybe not.
Learn about these programs, how they work, and what to be aware of before you sign up.
How BNPL works
A BNPL button or option is often encountered when checking out at online retailers. This option will usually link you to a BNPL app, such as Afterpay, Affirm or Klarna. A brick-and-mortar store may offer this option at checkout as well. Even though you’re purchasing in-store, you’ll still pay through an affiliated app.
Here’s the important fact: BNPL is a loan. That means you’ll need to get approved and the apps will usually run a soft credit check to confirm your information. Once approved, you can choose to link your debit card, checking account, or credit card so the app can collect the payments when they’re due. Next, you’ll generally make a 25% deposit on the purchase, and the item is yours. Most BNPL plans require you to pay off the rest in three fixed installments, but payment schedules can vary.
When BNPL may be helpful
BNPL programs can be a good choice for items you urgently need, but can’t afford right now, like medical equipment that’s not covered by insurance. It can also be option for workers with an uneven income flow who may experience lean times of the year, but know that better cashflow is ahead.
When BNPL may be harmful
It encourages overspending.
It’s easy to think that if you’ll only be paying a small part of the price today, why not buy it now instead of financing the full amount?
Missed payments are penalized.
Some services slap an interest charge on your outstanding balance, with rates as high as 40%. Other programs will charge a one-time late fee, which can be as high as $39. Others will tack on an extra fixed fee to all subsequent payments.
It can kill responsible financial habits.
If someone has purchased multiple items through BNPL programs, the monthly payments won’t be so minimal. The payments will need to be factored into a budget and can eat into other important categories, like savings.
Buy now, pay later programs can be super-convenient, but they also present risks. Our best advice? Use with caution or consider alternatives.
BNPL alternatives
Want to avoid BNPL programs, but don’t know how to afford the item you want? MSGCU has plenty of options to help members meet their financial goals. We’re here to help with:
Want to talk with someone more about BNPL, or understand how it affects your finances? Make an appointment with one of our certified financial counselors at any MSGCU branch office.
- low interest rate credit cards
- emergency funds with Member Fast Cash
- personal loans
- budgeting assistance and financial education
Want to talk with someone more about BNPL, or understand how it affects your finances? Make an appointment with one of our certified financial counselors at any MSGCU branch office.
Category: Finance
« Return to "Blog"
You May Also Like
Halloween costumes that won’t haunt your wallet
Spooky season is here and if you’re planning to dress up on October 31, don’t let costume costs or scammers’ tricks scare you away from a frightfully fun night.
Is it time to leave your bank?
Learn to recognize the signs that it is time to move on from your current bank and choose the next one. Plus, three key questions to ask when choosing a new bank.
From paycheck to plan: Mastering the art of a budget
Master your money at any age. Read on to learn how to build a personal budget, set goals, and take control of your financial future.
Your emergency savings account can help you weather life’s storms
Are you one of the millions of Americans who are concerned there’s not enough money in their savings to cover an unexpected expense? September is National Preparedness Month, and it’s an ideal time to start building your emergency savings.
A+ Ways to Save on Back-To-School Shopping
It’s time to think about heading back to school, and the second-biggest shopping season of the year doesn’t need to break the bank. You can trim your back-to-school spending and keep your budget intact.
Your guide for managing money in college
Books, tuition, housing, transportation…it can all seem overwhelming and expensive. Managing your money while in college doesn’t have to be. Read our 7 tips to help you ace real-world personal finance.
Lease it, love it, own it: Everything you need to know about buying your leased car
If you’ve leased your car the last few years, love your ride, and want to avoid rising auto costs, buying out your lease may be a good option for you.
Help your college kid make smarter, safer money choices, right from the start
When your child is ready to head off to college, here are 8 tips from MSGCU you can use to help them build financial freedom and make smarter, safer money choices.
Choosing a mortgage consultant: why it matters more than you think
Finding the right mortgage consultant is just as important as finding the perfect home. Use our guide to help you choose your consultant wisely.
I didn’t know I could use a home equity loan for that!
While most associate home equity loans with financing home improvements, there are many more uses for these handy loans to help you reach your financial goals.
7 Ways to Save on Pet Costs
Our pets bring us immeasurable joy, but the costs can sometimes feel overwhelming. Check out our 7 tips for keeping your pet healthy and happy without breaking the bank.
First-time homebuyer’s checklist
Purchasing your first home can feel intimidating at times. Our checklist provides valuable tips that will ensure you're ready for each step of the buying process.
Using Your Home's Value: A Guide to Home Equity Loans and HELOCs
If you’re looking to tap into your home’s equity, you have two great choices in a Home Equity Line of Credit (HELOC) and a Home Equity loan (HE). Learn more about these two options, their key features, and factors to consider before deciding which is right for you.
Hit the water, not your wallet: 8 simple steps to save for a boat
Ready to make waves without sinking your budget? Here are eight simple steps to save up for the boat of your dreams.
Maximize your tax refund with these 9 ideas
It’s tax refund time. Before you decide to splurge it all, consider one of these 9 alternative ways to get the most out of your refund.
You don’t need luck with a Certificate of Deposit from MSGCU
CDs are a great savings opportunity to consider to help your money grow. Read on to learn more about what they are and how they work.
Getting ready to file your taxes
Here are 8 tips that will ensure you’re ready to file your taxes with ease.
Consolidate and simplify: your guide to debt consolidation
If you feel buried under a mountain of debt, you might consider consolidating debt to get out from under it all. Read on to learn more about debt consolidation options and if it’s right for you.
Don’t fumble your finances: Understanding online sportsbooks
Sportsbook apps seem like a fun and easy way to win money. Like any form of gambling, they run the risk of monetary losses that can seriously impact your finances.
9 Ways to Save On Valentine’s Day
Looking for ways to celebrate your significant other that don’t break the bank? We’ve got you covered with 9 budget-friendly Valentine's Day ideas.
The Post-Holiday Budget Recovery Guide
The holidays are in the rearview, and if you’ve gone over budget with your spending, it’s time to deal with the aftermath. Here’s how you can get your budget back on track for the new year and avoid future budget-busting.
Make a New Year’s resolution to be fiscally fit
Ready or not, the new year is here. Do you feel financially ready for it? Read on to learn some tips to help start, and keep, financial resolutions.
Update or vacate? Making the best decision for your home.
With today’s hot housing market, is it better to update the home you’re in or move? Read on to learn more about the opportunities and challenges for each decision.
Anatomy of a car payment
Learn about the components of your car payment and the additional costs of car ownership.
How to shape up your finances before the holidays
You can make holiday shopping merrier by making these money moves now.
Know the deal for buying used wheels
Thinking about purchasing a used car? Before you sign on the dotted line, check out our helpful tips to ensure you’re getting the right ride and the right deal for you.
The Anatomy of a Mortgage Payment
Learn about the components of your mortgage payment, including how it's calculated and ways to effectively manage your payments.
EMDs and ARMs and ARPs, oh my! MSGCU breaks down common mortgage terms.
Mortgage terminology can be confusing, but we can help make understanding them easier. Read on to learn the ABCs (and EMDs, LTVs, and APRs) of mortgage language.
6 tips for a hassle-free mortgage process
Make your homebuying journey easier by starting with the right mortgage lender. Follow these tips to find one and enjoy a smooth homebuying experience.
Financing your vacation home
You’ve decided you’re ready to buy your dream vacation home, now what? In this article we’ll cover first home vs second home purchases, financing options, and more.
8 true costs of buying a vacation home
Considering a second home or vacation home? Here are eight key costs to consider.
Busting the 20% down myth
It’s common to think you need to save 20 percent of a home’s value for a down payment before home ownership can be considered. Good news: it’s a myth. Read on for more good news.
Road Trip for Less
Need a vacation, but don’t want to break the bank? A road trip might be the right blend of adventure and low cost you’re looking for.
5 reasons why you shouldn’t put off getting a loan
Even though rates have gone up, getting a loan can still be the right move for you depending on your situation. Here are five reasons why.
Put your home’s equity to work for you this summer.
The hot real estate market has led to a boom in popularity for home equity loans with many Michiganders choosing to stay in their home purchased or refinanced when mortgage rates were historically low. Read on to learn what a home equity loan is, what you can use it for, and see if it’s right for you.
Saving at the vet: how to keep your furry friends from breaking the bank
If you’re an animal lover, you know that vet bills can be overwhelming. Learn some great ways to lower your costs while still giving your furry friend the best possible care!
First timers’ guide: The three stages of the homebuying process
The process of buying a first home can seem overwhelming. With a step-by-step approach, the experience becomes less daunting – and a lot more fun.
The Heart of Your Finances: Your Checking Account
Maybe you’re considering opening a checking account or aren’t even sure if you really need one. The experts at MSGCU say you do and here’s why.
Don’t go mad this March over gambling. Understand the risks of online sportsbooks
Sportsbook apps seem like a fun and easy way to win money. Like any form of gambling, they run the risk of monetary losses that can seriously impact your finances.
Four Steps to Go From Renting to Buying
Tired of renting your home, but not sure you’re ready to buy? Here’s how to make the best decision and go from renter to buyer when you’re confident it’s time to purchase a home.
New Year Financial Resolutions
The New Year brings new financial goals, yet many of us feel overwhelmed when we start thinking about what we might tackle as a resolution. Here are 6 tips to get you started from the experts at MSGCU.
5 Ways to Increase Your Credit Score
Your credit score is vital to your financial health. An excellent credit score can open the door to large loans and better interest rates, as well as employment opportunities and more.
Discover the best ways to build and maintain an excellent credit score.
Payday Loans: A Serious Problem with A Smart Solution
Payday loans can seem like an easy way out of a financial jam, until you get caught in the spiral of fees. Fortunately, MSGCU has you covered when unexpected needs arise and you’re out of funds until the next pay day.
Mortgage options to help you unlock the door of your dream home.
Not all mortgages are the same. Rates, product offerings, and other benefits add up to your perfect mortgage package.
9 tips to follow on National Financial Awareness Day
MSGCU helps you get the most out of your money every day.
Is it time to choose a new bank?
Read on for 4 signs it’s time to leave a bank, and 4 questions to ask a new one.
Why CDs are a Great Investment for Younger Savers
For millennial and Gen-Z savers, Certificates of Deposit offer the best of both worlds: high returns & no risk.
A Blueprint for Managing Credit Card Debt
Paying down high-interest rate credit card debt can feel overwhelming sometimes. Check out these tips to help you effectively knock out your debt.
How To Make Certificates of Deposit Work for You and Your Savings Goals
Is building your savings account a priority in your financial goals? Learn more about your options and determine the right choice for you when it comes to savings accounts and certificates of deposit.
Beyond the piggy bank: 5 ideas for helping kids achieve more financial independence.
Teaching kids about money management can seem daunting, but it doesn’t have to be complicated. Read on for five simple money truths to help prepare your kids for a successful financial future.
What to do before getting your first loan.
You’re considering a big purchase, and you’re going to need a loan to make it happen. Before you take the plunge, take these steps to make sure you’re ready for your first loan.
Turn renting into owning with our step-by-step guide
Tired of renting, and feel the homebuying process can be overwhelming? See why now is the perfect time to become a homeowner with our easy step-by-step homebuying guide.
Going to college? Take MSGCU with you.
Learn all the convenient ways you can bank with us, no matter which campus you’re headed for.
Six smart financial moves to make when you get your first “real” job.
Your hard work has paid off and you’ve landed your first “real” job. Congratulations! As you embark on your brilliant career, you can make your future even brighter by making these smart financial moves.
5 steps to RV- and boat-buying for an unforgettable spring and summer.
Ready to spring into Michigan’s warm weather activities with a new or used boat, RV or ATV? Check out MSGCU’s 5 steps to RV, boat and powersports buying.
Applying for a new mortgage? We have tips to save you time.
Whether you are a first-time home buyer or reentering the home buying or refinancing market, the application process might seem daunting. Before you start emptying your filing cabinet for documents, see how you can streamline the application process.
8 ways to get your teen ready for financial independence.
Let go, hang on, let go, hang on, let go … help with getting your teenager ready for more financial independence is here! Read on for wisdom from the financial champions at MSGCU.
5 ways to save money on a new or used car
With a few smart financial moves, you can save a lot of money on your current vehicle or a new car purchase.
Spotted: hidden fees in rates. Here’s what to look for to get the best deal.
A good rate can turn bad quickly when fees and points are included. Read on for a simple tip to spot the best deal when shopping for a mortgage.
Your credit score: What it is and how you can make it better.
What is a credit score, and how can you make sure yours will help, not hurt you? Read on to get answers to these questions and more. We’ll help you get off on the right foot with your credit history.
Spring clean your finances
Whether you are looking for ways to save or spend wisely this spring, the team at MSGCU has options and advice for you.
Two truths and a lie about homebuying success
As the winter turns to spring, many turn to shopping for a new home. An MSGCU mortgage expert describes two truths and a lie about being ready for the spring shopping season.
How to open a bank account at MSGCU
Ready to manage your own money? Read this blog to learn how to open an MSGCU bank account and make the most of your membership.
Your 2022 home goals: Tips for financing home improvements or a new home
A common 2022 goal is home improvement, either with renovations or a move. Here are some tips on financing your goals for the new year.
Start ahead, stay ahead: 7 must-haves for a better first bank account
Think you’re ready for your first bank account? Read on for 7 must-haves when looking for your financial partner.
8 questions to ask before taking out an auto loan
Whether you’re buying or refinancing, choosing an auto lender is a big decision. Take your time to find one who will work with you and your financial goals; in other words, do your homework. Read on for 8 key questions to ask lenders before you get (or refinance) an auto loan.
Check interest rates today, save tomorrow.
Could your interest rates be lower or are you paying too much in interest rates? Read on to find out more and what to look for.
10 tips to follow on National Financial Awareness Day.
Financial Awareness Day was August 14. Let MSGCU help you get the most from your money with these tips every day.
8 myths of modern mortgages every homebuyer should know.
Whether you’ve done this before or you’re a first-time homebuyer, getting current about best practices for finding and financing a new home is always a good idea.
5 financial habits to start today
Try these five tips, or start with just one, to bring your financial wellbeing to the next level.
How to win at debt
An important consideration when taking out a loan is whether it might be good debt or bad debt. Not all credit is bad, read on to learn the difference.
Starting your emergency savings fund
It’s never too late to start your emergency fund. Read on for easy tips you can do today to start saving.
Debit or credit: What’s the difference?
Swiping and signing to make a purchase is so easy these days, but do you grab your debit card or credit card? Does it matter? Read on for answers.
Smash your credit card debt
While not all debt is bad, too much can limit the amount of money you can put toward your life goals. Read on for three easy steps so you can use credit to your benefit versus being overwhelmed with payments you can’t afford.
Small savings = big rewards!
Saving money doesn’t have to be daunting. Read on for quick and fun ways to save from MSGCU’s experts.
Study, work, save: How to win at college.
Save money in college without having to give up everything you love with these tips from Michigan Schools and Government Credit Union.
MSGCU is on the front line of your finances
MSGCU has always been here for its members, even during COVID-19. Learn how we helped members financially impacted by COVID-19.
See you at the drive-thru!
Did you know you can complete the same actions through an MSGCU drive-thru that you can in a branch? The drive-thru is a safe and easy way to complete transactions, and a friendly MSGCU team member is always there to help.
How to make your stimulus check work for you