Opting for an installment plan may seem like a smarter choice compared to charging expenses on a credit card. However, if your travel plans end up being postponed or called off, you could find yourself making payments for a trip you never took.
GREENSBORO, N.C. — Buy now and enjoy now, but pay later. It’s convenient and lots of people are using it.
A staggering number of over 95 million Americans utilized Buy Now, Pay Later Loans in 2023. These loans cater to a range of purchases and are appealing due to their quick approvals, lack of stringent credit checks, and convenient installment options.
Increasingly, people are turning to payment plans as a convenient method to fund their upcoming cruises or vacations. This approach allows them to spread the cost gradually rather than facing a hefty credit card statement riddled with interest charges. Nonetheless, one significant downside looms over this payment method…
“Unlike credit cards, BNPL loans don’t always come with the same consumer protections. If your trip is canceled or delayed, getting a refund can be a nightmare, sometimes leaving travelers stuck making payments for a vacation they never took,” said Lisa Gill, Consumer Reports.
Here’s the other warning, read the fine print. While some BNPL do offer interest-free payments, typically split into four installments over two months, others also include conventional loans with interest rates as high as 36%.
“Some consumers end up with unexpected fees or sky-high interest rates, turning what seemed like a good deal into a costly purchase,” said Gill.
The better option, try finding a 0% credit card to put the trip on. Sometimes that’s easier said than done, but a new resource from The Consumer Financial Protection Bureau just came out with a credit card comparison site that is free and has no ads.
CFPB CREDIT CARD COMPARISON TOOL
Instead of just a blanket list of cards, it is designed for all consumers, regardless of credit score. You can put your credit score in, the state you live in and what kind of card you’re looking for: low interest rate, balance transfer, rewards, etc.
