Press.

Money Fix: Point of Sale lenders offer a new twist on ‘buy now, pay later’

Newsday logo

Buy now and pay later. That’s how it goes with point of sale lenders like Affirm, Afterpay, Klarna, QuadPay and Sunbit. According to new research from Bankrate.com, consumers are increasingly turning to POS lenders to meet their financial needs.

Ted Rossman, industry analyst for CreditCards.com explains how it works: “Point of sale lenders are sometimes called reverse layaway. Basically, they’re an alternative to traditional credit cards and loans. The consumer buys something (clothes, electronics, etc.) and gets it now (as opposed to traditional layaway in which you need to make all of the payments before taking the item home).”

You borrow at the store at the time of purchase and pay back the money over a specified period of time, unlike most credit cards that offer revolving credit. Some of the providers offer interest-free financing for a time (such as six weeks), whereas others charge interest right away, says Rossman.

These services are widely available. “Some of them are linked to participating retailers (such as Affirm, which partners with Walmart among others, and Afterpay, which partners with companies such as Forever 21, Mac Cosmetics and Billabong to offer loans). Others (like Klarna) can be used at any website (they give you a ‘ghost card’ number to input at checkout),” says Rossman.

So, you can easily get your hands on this alternative form of credit. Should you?

The pros

“These options can be convenient, accessible to people with lower access to credit, and their finite timelines can help prevent consumers from spiraling into debt. For someone with a limited credit file, it can also be an opportunity to build a good credit history,” says Arad Levertov, CEO of Sunbit, a fintech company based in Los Angeles that allows customers to split any payment at the point of sale into equal monthly payments.

Another plus, says Rossman: “Many consumers like the predictability of these plans; they know exactly how much they owe and how many months they have to pay it off.”

To read the full article visit Newsday at this link.

Related Posts

Dental, Eyewear, Press, Retail
Weave, Sunbit Partner to Bring Buy Now, Pay Later Options to Small Healthcare Practices
Innovative partnership will integrate Sunbit’s BNPL technology with Weave’s patient communications platform LEHI, Utah–(BUSINESS WIRE)–Weave (NYSE: WEAV), the all-in-one customer (...)
Auto, Dental, Eyewear, Press, Technology
Majority of US Consumers Want Access to Buy Now, Pay Later (BNPL) for Necessary Purchases
PRWeb A Harris Poll survey commissioned by Sunbit found that consumers overwhelmingly report positive sentiments following BNPL use, with those (...)
Dental, Press
Dental Patient Financing: What’s New and Why It Should Matter to You
Dental Products Report You probably already have a patient financing program in place at your practice. But are you using (...)
We use cookies on this site to enhance your user experience. By using our site, you acknowledge that you have read and understand our policies.