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With summer in full swing, and many countries easing travel restrictions, you might be eager to plan a post-pandemic trip. Even if you managed to save some money ahead of time, travel expenses can quickly add up, and you might be tempted to choose the ‘buy now, pay later’ option that’s offered at checkout on many travel websites, including Carnival or Expedia.
These point-of-sale loans are seductive to consumers who don’t want to pay for their post-pandemic vacations with one lump-sum payment, allowing people to make payments over a fixed period of time, sometimes without high interest rates.
But is using the ‘buy now, pay later’ option to pay for your flights or hotel stays too good to be true?
Select explores some of the benefits and drawbacks of using ‘buy now, pay later’ for travel.
‘Buy now, pay later’ providers (also known as point-of-sale loans) offer consumers the option to sign up for a payment plan either when they’re buying something on a retailer’s website or directly through the loan provider’s website ahead of purchase
Point-of-sale loans give consumers the ability to make installment payments over a fixed period of time until they completely pay off their purchase. This means that you’ll make payments toward your purchases bi-monthly or monthly depending on the plan and/ or provider.
These payments can typically be automated by providing your debit card or bank account information. While many providers boast 0% interest rates, some point-of-sale loans can have interest rates upwards of 30%, higher than the APRs on many credit cards.