San Juan, Puerto Rico – Buy Now, Pay Later (BNPL) services have become increasingly popular among online shoppers, especially during peak spending seasons like the holidays. While these services offer convenience and flexibility, experts warn consumers about the potential risks involved.
According to the 2024 Puerto Rico Digital Trends Study conducted by Estudios Técnicos for the Sales and Marketing Executives Association (SME), 25% of consumers are familiar with the concept of BNPL, and 30% of those aware have used it. Popular BNPL platforms include Klarna (72.2%), Afterpay (11.1%), and Affirm (4.7%).
While financial advisor Myrna Vázquez acknowledges that BNPL services can help finance purchases over time, she cautions consumers about the potential for additional fees if payments are missed. "It's important to use BNPL services with a plan for how you'll make your payments before making a purchase," Vázquez said.
Yesenia Otero, manager and counselor at Consumer Credit Counseling, warns that consumers who haven't managed their finances well during the holiday season should carefully evaluate BNPL offers to ensure they are truly interest-free. She recommends starting to save in January to avoid relying on credit cards or BNPL for future holiday purchases.
Economist José Caraballo Cueto expressed concern about the potential negative consequences of BNPL, stating that many consumers mistakenly believe they don't have to pay back these loans. "People need to be aware that 'paying later' can actually mean paying more, with interest rates sometimes reaching 30% to 40%. This can lead to credit problems or even bankruptcy," Caraballo Cueto warned.
Tips for Using BNPL Services:
Create a payment plan: Have a clear plan for how you will make your payments before making a purchase.
Set up automatic payments: Ensure you have sufficient funds in your account to avoid overdraft fees.
Evaluate the total cost: Compare the total cost of the purchase to avoid overspending.
Check interest rates: Ensure the offer is truly interest-free and that the price is competitive.
Consider your financial situation: Only use BNPL if you can afford the payments.
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