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Every week, join Whitney Quick as she helps you navigate life as a smart consumer. You'll cover everything in avoiding the latest scams, including phishing emails, medical equipment fraud, understanding layaway, hiring a reputable tax preparer, and even digital spring cleaning. Add to your toolbox and flip through your Consumer Handbook Thursdays during NPR’s Morning Edition at 6:42 a.m. and 8:42 a.m., only on KRCU.

Consumer Handbook: Buy Now Pay Later

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Better Business Bureau® (BBB®) advises consumers to read and understand the terms of an installment purchase before clicking "Buy.” Otherwise, they could be surprised by fees or other charges that could add to the cost of their purchases.

Installment purchases allow a buyer to space out smaller payments on an item over time without using a credit card. Unlike the layaway services many retailers offered in the past, a buyer receives the item immediately, without having to pay the full purchase price first.

A recent report by the Consumer Financial Protection Bureau found that purchases through the largest installment services topped $24 billion in 2021, nearly tripling the 2020 total of $8.3 billion. The agency notes that these services are most utilized by Millennials, or 25- to 40-year-olds.

Buyers typically will need to be approved by the financing company before taking advantage of an installment payment plan. While many installment payment services come with only a few small payments and zero-percent interest, interest rates on installment purchases can be as high as 30%, depending on your credit history and the retailer, and installments can last for as little as a few weeks or as long as 39 months. Late fees also may apply if you do not make payments on time.

Consider it a loan. It’s critical to remember that buying an item and paying for it later, even without interest, is still borrowing money to enjoy a product before it is paid in full.

Stick to a budget. Before signing up to pay in installments, understand exactly how the service works. Read the fine print of the agreement to find out what company is financing, how long the financing terms are to pay off the purchase and in how many installments, how they handle late payments, and how much interest is charged.

Cape Girardeau native Whitney Quick is the Regional Director of Better Business Bureau in Cape Girardeau, MO, and is responsible for outreach efforts in Southeast Missouri and Southern Illinois. Quick is a graduate of Cape Girardeau Central High School and Southeast Missouri University where she majored in public relations. Quick enjoys helping educate consumers in the southeast Missouri region by sharing consumer tips with groups and educating them about BBB’s resources.