Published On: July 20, 2022


What You May Not Know About These Services

Services like “buy now pay later” now account for $100 million in annual transactions and are a popular financial resource for millions of Americans. These methods make purchasing simpler, but there are hazards involved as well.

Consumers enjoy the convenience of “buy now pay later,” but they are unaware of how it affects their wallets.

“People love the convenience, but there is still a lot of misunderstanding regarding BNPL services and their influence on people’s financial lives.”, says Amy Maliga, a financial educator with Take Charge America. It’s simple to overlook the future threats because there is such confusion. Because of this, it’s essential to look more closely at any new services or products, especially those that make it simpler for you to spend your hard-earned money.  Prior to utilizing BNPL services, Maliga advises you keep the following in mind:

Don’t be misled, these “loans” function as credit

BNPL payments are a form of credit, despite the fact that BNPL providers may advertise themselves as a more convenient way to pay for regular purchases without using credit or debt. Additionally, some services impose late fees or interest if you miss a payment. Use caution when utilizing these services as it is simple to slip into debt.

Most likely, you’ll spend more.

Retailers aggressively market BNPL since customers tend to spend more money when using these services. Two-thirds of buyers who used BNPL plans spent more than they otherwise would have, according to a LendingTree poll. Be sure to examine your finances and bank account before making that expensive purchase. Make sure you can actually afford it. Otherwise, you run the danger of racking up debt you cannot pay for.

Inconsistent impact on credit scores.

You don’t benefit from the advantages of responsible repayment because the majority of BNPL suppliers don’t report on-time payment information to the major credit agencies. Negative incidents, such as late payments or collection activities, are more likely to be recorded. Due of this, it is even more important that you make all of your BNPL payments on time and without missing any.

No consumer safeguards.

These services are not covered by the Truth in Lending Act because of BNPL’s typical four-installment payment schedules. This mean that with BNPL providers, consumers are not protected from any potential predatory or misleading lending practices. What is the difference?  Federal law requires five installments before any regulations are imposed.

Source: (intended for educational purposes only)

woman buried under paperFeeling buried with debt? Check out National Foundation of Consumer Credit Counselors, but beware of the scams offering “debt relief” services.

From their website: “Beyond our credentials and our decades of service as a nonprofit financial counseling organization, what we offer is hope. The kind of hope that allows you to envision a bright financial future that is achievable and sustainable.

Our grounded expertise, inclusive solutions, and commitment to the common good are what turn that hope into a plan that fulfills your dreams. Years of independent, academic research have proven our efforts effective. Ultimately, we believe in better futures for all, and we are committed to seeing that through.”


What may appear to be “FREE” does not mean free.  Nor, is “low cost” really low cost.  It means that you will pay later.  It may mean your free trip to the mountains comes with obligations to attend two days of intense sales pressure to buy a timeshare that no one wants.  It may mean you get a free puppy who hates your children (or it could mean life is perfect and everyone gets along).  The lenders or retailers are in the business to make as much money as possible.  How much profit received by the owners of the business (usually shareholders) dictates whether they will keep the folks in charge of the business. Take time to investigate why someone is offering something for free, or what appears to be easy terms, and investigate what are you obligated to do or what the cost will be in the long run.

Diane L. Drain

Knowledge is Power -light shining on a book
By |Published On: July 20th, 2022|Last Updated: July 22nd, 2022|

Share this article

About the Author: Diane Drain

Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.

*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*

Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Google Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Yelp Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Avvo Reviews
Avvo - Rate your Lawyer. Get Free Legal Advice.
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Alignable Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Better Business Bureau
5 / 5

“You folks are the BEST OF THE BEST in Arizona.” M.H.

You and Jay are the best attorneys I have ever had or needed and thank God for the Honorable Robert Gottsfield in recommending you folks – I would have never made it through the entire process without you and Jay and God Bless you both always and stay in touch as well. You folks are the BEST OF THE BEST in Arizona.

5 / 5

“My only regret is that I didn’t find Diane sooner.” K.H.

I can’t say enough good things about Diane. The way she handled my not typical circumstances was amazing. I was very nervous to start the bankruptcy process but Diane just has a very comforting way of explaining the whole process. My only regret is that I didn’t find Diane sooner. If you find yourself in a financial situation that you can’t correct on your own, please Call Diane Drain as soon as possible.

5 / 5

“Filing for bankruptcy can be a stressful life event” R.A.

Filing for bankruptcy can be a stressful life event, and selecting the right attorney can add to this stress. Diane and Jay were a pleasure to work with, and it is obvious that they are passionate about helping people get their life back on track. I would highly recommend them if you need a bankruptcy attorney.

Related Posts

  • Published On: July 24, 2022

    Want to avoid dishonest debt collectors?  Watch this video from FTC’s Consumer Advice By Joseph Ferrari,July 22, 2022 (reprint from FTC, Consumer Alerts) During Military Consumer Month 2022, the FTC [...]

  • Published On: June 19, 2022

    RELIGION AND BANKRUPTCY Bankruptcy has its roots in religion. No one should avoid dealing with debt because of misunderstandings about religious or ethical considerations. It is NOT shameful to seek relief from crushing debt! [...]

  • Published On: June 13, 2022

    Diane Drain received the 2022 Preeminent Award and Gold Client Champion Award from Martindale-Hubbell. The 2022 AV Preeminent award is given to an "elite group of attorneys who have been rated highly by their peers [...]

  • Published On: April 18, 2022

    Education Loans Can Be Discharged in Bankruptcy Busting myths about bankruptcy and private student loans By Robert G. Cameron – APR 12, 2022 (Reprint from Consumer Financial Protection Bureau "".  The following is an [...]

My intention is to put you back in control of your life
Start with $0 down*. We provide affordable payment plans.