Buy now, pay later
Training 375 minutesbuy now pay later
You are 24, study design and work part time at a print shop for $1,600 a month. $320 headphones come with "4 payments of $80". Your roommates say: "Everyone does it, there is no interest."
Training goal: Use installments without getting trapped
▶ Play this trainingSituation
- Do it, $80 is not much
- Close one of the current plans first
- Do it, but over 12 months for a smaller payment
- Move the due date to the day after payday
- Skip it, pay in a couple of days
- Pay with a credit card
- Installments, the money stays on the card
- Buy on installments, plus a second pair as a gift
- 7% off, paid from your tech savings
- Take it, the payment is only $88
- Decline and save $150 a month for six months
- Get a pricier sofa, since it is installments anyway
What you will learn
- Before a new plan, add up all your current payments.
- An upfront discount reveals the true cost of "0%".
- Long plans often carry high interest: count the total.
Your real-life step
List every installment plan in one place: payment, date, amount left.
Questions and answers
What is buy now pay later?
It is an installment plan at checkout, often 4 payments every 2 weeks or monthly. Short plans are often interest-free, longer ones charge interest.
Does buy now pay later affect your credit score?
It depends on the provider and country. More and more report missed payments to credit bureaus, which hurts your score.
What happens if you miss a BNPL payment?
Usually a late fee, a block on new purchases, and sometimes the debt goes to collections.
More trainings in this module
- How banks work
- Debit vs credit card
- Cashback and rewards
- Price vs value
- Big purchase planning
- Buying a car
Numbers are illustrative. A game, not financial advice.