Credit or debit? That's the question many consumers ask themselves when they open their wallet to pay for a purchase. If the bag has been filled with a couple of tomatoes and a loaf of bread, you will probably end up paying for it right away. But what if it is a thousand-euro computer or a top-of-the-range smartphone? The options to buy now and pay later are so many that it is difficult not to fall into temptation when you have to part with a lot of money at once.
It is increasingly common to fill the shopping cart in a virtual store and, when paying, find the logo of companies such as Aplázame or Klarna, which allow you to buy and pay in several installments without having a credit card, explain the experts of the financial product comparator HelpMyCash.com, who have analyzed which are the best options to buy now and pay later. However, you can also open your wallet, take out your usual card and pay for your computer, your new mobile phone or your summer trip in installments. But is it worth it?
One of the main dangers of paying for a purchase in installments is that the customer may have the false feeling that they are spending much less money than it is actually going to cost, HelpMyCash sources explain. Nothing is further from reality. The money is going to have to be paid yes or yes; in fact, it is likely that you will end up paying more than what the product label indicated if you have to pay interest.
The cards have an average interest rate of 18%, according to the Bank of Spain. Taking this figure as a reference, if a customer decides to buy a computer for 1,500 euros and pay for it, for example, in two years, each month he will pay only 75 euros. An apparently affordable fee, but if we add the total, the reality is that the computer will end up costing 1,797 euros. In addition to the extra cost, you run the risk that during those two years your computer will break and you will end up paying for a product that you no longer use.
Some credit cards, however, allow you to pay in three or four months without interest, as do some fintech companies associated with online merchants.
For example, the WiZink Click credit card allows you to pay for a purchase of between 85 and 1,000 euros in three months without commissions or interest (0% APR). That is, if we buy a mobile phone for 600 euros, we will pay three installments of 200 euros each, nothing more. The card has no commissions and, in addition, WiZink gives away an Amazon check for 100 euros to customers who request it and spend at least 300 euros during the first three months.
As for fintech, Aplázame allows customers of the online businesses with which it collaborates to spread the cost of their purchases in four installments without interest or commissions (0% APR).
Amazon, for its part, allows you to pay for purchases between 75 and 1,000 euros in four installments also at 0% APR. To use this service, you just have to select the Pay in 4 option as the payment method during the purchase process. The promotion is valid until July 13.
The problem, above all, comes if the client is late in paying a fee, in which case they will have to pay a penalty, they explain from HelpMyCash. Something that can happen, especially when there are so many facilities to pay in installments and the customer only needs to make a couple of clicks to buy in several installments, they do not even need to have a credit card and have received the approval of their bank if they choose for using the services of a fintech.
A third of US consumers who have used these services have ended up late in paying one or more installments, according to a Credit Karma study published last year.
So in the case of paying in installments, either with a credit card or with another system, it is advisable to ensure that each month the payment of the installment can be met.
Also, do not make the mistake of spending more because, simply, you can. It is important to set a budget and stick to it. The danger lies in the fact that with this system, the consumer may end up spending more than he had planned, since he does not have to pay immediately. In fact, in order to benefit from these monthly payment systems, sometimes you have to spend a minimum amount, which encourages you to fill the shopping cart more than necessary. But all that money will have to be returned and if the client did not have the money to spend more before, they probably will not have it later either, so in the end their account will suffer equally.
