Buy Now Pay Later, Too Good to be True?
With just a simple click of a button, consumers can purchase items they want and pay off the balance in payment installments. Seems too good to be true, right? As Buy Now Pay Later (BNPL) programs have been on the rise over the past few years, do we fully understand the ramifications of BNPL? We wanted to explore the darker side to Buy Now Pay Later and how Neighborhood Credit Union can help.
BNPL can seem like the better option when it comes to checking out because of how they tend to advertise themselves – low to no interest, no hard credit checks – but in the long run is it really the better choice?
During the time of purchase, a BNPL program might seem appealing for the higher-ticketed items you normally would not be able to afford. But what happens after you purchase two or three of those high-priced items? According to the same study, 36% of consumers admit to using BNPL programs to make purchases that they otherwise cannot afford, and according to this article by CNBC, nearly 30% of consumers who have utilized BNPL programs struggle to keep up with the payment and have had to skip paying essential bills to avoid defaulting.
While consumers may become overwhelmed with the amount they owe to a BNPL, Neighborhood Credit Union provides options to help you avoid getting caught in the Buy Now Pay Later cycle. Let us take a look at the different credit cards Neighborhood Credit Union has to offer.
Many consumers can utilize credit cards to build up their credit score and in return will have higher chances of success when applying for loans or mortgages. Not all BNPL platforms report to credit agencies, so someone using BNPL might not see a positive change in their credit score.
Credit cards also tend to provide benefits that BNPL does not. Consumers can enjoy cash back, points, airline miles, and more depending on the type of credit card they utilize to make purchases! Here at Neighborhood Credit Union, we have two credit cards with equally great benefits.
Get 0.0% APR (Annual Percentage Rate) for six months on a Visa Platinum credit card, enjoy no annual fee, no balance transfer fee, and a variable interest rate of 8.25-18.00% APR after the promotional 6 months.1 Our Cash Rewards credit card has 1.50% cash back on all purchases, with no cash back limit, no annual fee, no balance transfer fee, and a variable interest rate of 11.25-18.00% APR.2
1Must be 18 years or older to apply. Applicants under the age of 21 may require a co-signer unless independent means of repayment can be established. Introductory APR only applicable to new credit card applications. 1.99% Introductory APR for 6 months from issuance of the card on balance transfers and purchases. After the introductory period, APR will be adjusted based on creditworthiness and balance transfer fee will be at 3%. Rates are variable and subject to change and will be calculated based on the Wall Street Journal Prime Rate and may go up to a maximum of 18.00%. Minimum payment is 3% of total new balance or $35.00, whichever is greater. Cash advance fee is $10 or 3.00% of the amount of each cash advance, whichever is greater. Late and returned payment fee: up to $35. A Foreign Transaction fee of 2.00% will be applied in US Dollars to each transaction conducted outside of the United States. Additional limitations, terms and conditions may apply. Equal Opportunity Lender.
Who We Are
As an active part of the community for 93 years, Neighborhood Credit Union is a not-for-profit financial organization serving the state of Texas with branch locations in Collin, Dallas, Denton, Ellis, and Tarrant counties. With assets topping $1 billion, Neighborhood Credit Union has a continuously growing membership of over 60,000. For more information, call (214) 748-9393 or visit our homepage.