Paying on the Internet: The pitfalls of “Buy now, pay later”

As of: 06/27/2022 4:08 p.m

PayPal, Klarna or Ratepay enable online shopping on credit. Young women are particularly keen to take advantage of this opportunity, as a survey shows. If you miss payment deadlines, you will quickly face bigger problems.

Talia Bitgin mainly orders trousers, shoes and skirts online. But she doesn’t want to pay for all of this right away. “I’d like to try the goods on at home first and see if they even fit me,” says the psychology student from Frankfurt. “Then I only pay for what I keep, nothing else.”

“Buy now, pay later” – translated: Buy now and pay later. Talia Bitgin regularly uses this payment option for online shops. Payment service providers such as PayPal, Klarna, Ratepay, Afterpay or Unzer are often behind this. They enable consumers to pay for the goods 30 days later, for example. This can ultimately be a purchase on account, without additional costs.

Partly high interest rates for installment payments

Another option often offered to consumers is to pay in installments. However, interest may accrue. As the Internet portal Finanztip has determined, an annual interest rate of up to 15 percent is due in extreme cases.

Nevertheless, 24-year-old Emmi Fürst from Neu-Isenburg often pays in this way because it is very convenient for her. She usually keeps to the payment deadlines. “However, it has happened to me that I was two or three days late with the payment,” says Fürst. So far, no one has complained. Lucky for Emmi Fürst.

According to the Wiesbaden credit agency Schufa, this type of payment is particularly popular among younger people. Young women and girls in particular resort to it. “Because ‘Buy now, pay later’ is considered a supposedly safe and convenient payment option on the Internet,” explains Schufa board member Ole Schröder.

Often an entry into the debt trap?

Consumers can pay with just one click. This is made possible, for example, by apps in which all the data important for payment is already stored. According to the survey, however, one problem is the payment deadlines. 40 percent of those surveyed have forgotten them at least once and therefore received a reminder.

Often there is simply not enough money, says Schufa board member Schröder. “But a lot of small loans also put a strain on the household budget, so the whole thing can quickly develop into a debt trap.” Most adolescents and young adults are well aware of the problem – this also emerges from the survey.

Postponing debt is expensive

For Moath Saed, “buy now, pay later” remains the only way out despite everything. Because the money is not enough for the dental student from Marburg. “I’ll pay off the debts I made this month next month, then I’ll be broke again, then I’ll postpone the debts until the next month, it’s a vicious circle,” says the 22-year-old, laughing sheepishly.

The Frankfurt debt counselor Matthias Klusmann can confirm that. In many cases, those who put off their debts pay more and more interest and fees. It gets really expensive when a collection agency gets involved after one or two reminders.

Negative Schufa entry threatens

According to Klusmann, this office often charges other fees in addition to the actual collection costs. For example, because the residents’ registration office was asked whether consumers continue to live where they lived at the time of purchase.

“Then there are costs that are no longer related to the actual purchase price,” says the expert from Adjulex debt counseling in Frankfurt. In addition, those affected may be threatened with a negative entry at the Schufa, which could also make all other financial transactions significantly more difficult.

Youth study by Schufa

Ursula Mayer, HR, 6/27/2022 3:26 p.m

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