Online shopping and payment platforms like Amazon Pay, Paytm, etc. provide a special feature called pay later. This feature enables the user to shop on credit and the payment of the amount can be made a month later. The credit limit varies from one app to another, and the bill is generated at the end of every month for the user to check and pay the amount. While there are a few benefits of these apps, a lot of people are unaware of their disadvantages.
If you are someone who uses or plans to use the pay later feature or apps, then these pointers may turn out to be helpful for you:
The habit of buying unnecessary items
When you shop online with the mindset of paying later, you often forget that the payment is going to happen someday. This means that it doesn’t hurt people to buy extra or expensive items when the money is not being debited in real time. Therefore, buying too much becomes a bad habit.
Heavy penalty on late payment
Sometimes, our salaries might be credited to us a couple of days later due to bank holidays or other reasons in a particular month. This can lead to the apps levying heavy late fee charges for not making the payment on time. Therefore, while the credit amount will already affect your monthly budget, the extra late fee will further deteriorate your monthly expenses.
Credit scores can take a plunge if payment gets delayed
People often forget that every credit system influences credit scores. While you may not realise it, late payment not only leads to extra penalty charges but also affects your credit score. While depleting a credit score is relatively easy, raising it back up to an optimum level to be able to take a loan in emergency scenarios is a very difficult task.
Keep these points in mind whenever you plan to opt for pay-later services on any platform. Casually opting for this feature can greatly hamper your finances.
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