Why we don’t do Buy now, Pay later

Call me old-fashioned, but I feel like we need to go back to the old days of buying something when you have the money for it.

Today’s consumerist society fuels the demand to have new things constantly and immediately. And aside from the considerable environmental reasons why this is not a good idea, I’m also concerned about the rash of ‘Buy now, Pay later’ companies springing up recently.

They seem to have replaced the Pay Day loan companies, many of which were more-or-less shut down through stricter legislation (or went out of business) following growing concerns about unethical behaviour and sky-high interest rates that were pushing vulnerable people further into debt.

Yes, I appreciate that I’m going to be accused of being out-of-touch, and that sometimes people need to buy a new washing machine or essential clothing items on credit because they don’t have the time to wait or the spare cash to buy now. Done responsibly, this is clearly fine and a necessary service.

What I’m talking about it is the push to buy fast fashion, or the latest must-have gadget or toy. Often sold as a simple ‘you can have the item now without paying!’, or ‘spread the cost over three low monthly payments!’.

And in a few simple clicks, you’ve satisfied your craving to have the new item, delivered in shiny packaging a few days later, without having to worry about paying for it.

Except, of course, it doesn’t work like that. You do have to pay for it, it’s just that payment is delayed. A couple of months of purchasing like that and you could easily find yourself with growing monthly payments that quickly become unmanageable. And then where do you find yourself?

Because they don’t charge interest, these companies are currently not covered by the Financial Conduct Authority, so they are unregulated. Yet if you fall behind in your payments, due to an unexpected bill, lower income one month or over-committing yourself, you can be charged late payment fees.

This is how people get into a cycle of debt. Late payment fees make it even harder to afford the next month’s bills, and as your credit rating has been affected now, the only place you can turn to to get credit, are places that charges sky-high fees for ‘high-risk’ customers.

I don’t want to sound patronising, and if this is how you manage your finances and you find it works for you – that’s great. But I don’t think it’s something I’ll be offering anytime soon.

If you’re on a low income, or just want to be more sustainable anyway, I would encourage you to buy secondhand instead, there’s normally plenty for sale in our Facebook group – The BeebooBUZZ.

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