MILWAUKEE (NBC 26) -- The Wisconsin Better Business Bureau is reminding online shoppers to be careful when using installments to pay for online purchases.
The BBB says many online shops are offering pay in installment services that target high school and college-age buyers. These buy-now-pay-later services are new and quickly gaining in popularity.
But, with any financing option, the BBB says consumers should do a little research before signing up, so they can avoid getting in over their heads.
Here are a few tips from the BBB on using installed payments:
- Don’t forget you are borrowing money. The BBB says it’s critical you keep in mind you are still borrowing money to enjoy a product before you’ve paid for it in full. Ask yourself if paying the total price means spending more than you can actually afford, and make your decision accordingly.
- Stick to your budget. Think about how bi-weekly or monthly payments could affect your budget – even if the payments seem small. Will they cut into the funds you’ve set aside for necessary expenses, such as your rent or groceries?
- Read the fine print. Before you sign up to pay in installments, be sure you understand exactly how the service works. Find out what company is financing your purchase, how long you have to pay off the purchase and in how many installments, how they handle late payments, and how much interest you’ll be charged, if any.
- Get to know the financing company. If you do decide to take advantage of an installment payment plan, look up the financing company on BBB.org to make sure they are a reputable company with honest business practices.
- Know how your credit could be affected. Keep in mind that unpaid debts can be sent to collections agencies and after a delinquent period of 90 days can be reported to credit bureaus. This could have a negative impact on your credit score.
Click here to learn more about shopping online safely.
