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Is ″Buy Now, Pay Later″ the consumer credit magic bullet we’ve all been waiting for?

BIScom Subsection: 
Author: 
Nigel Morris-Cotterill

Buy Now, Pay Later is a rapidly growing consumer credit sector. Last year, it is reported, it was used in 3.6% of retail sales in the UK. Is it a panacea or a plague?

Long Read: 17 pages.

Credit cards

Credit cards may have an interest-free period but consumers have to be careful: not all cards have an interest free period and of those that do there are significant inconsistencies. There are also, usually, substantial fees for late payment.

Interest free, where it is available, only refers to card balances that are paid off in full before the due date. The maximum period from purchase to payment is, usually, seven weeks but it can be much less. Once interest rates kick in, they are usually at high rates which rise further with default.

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