Apps charge heavy late fee for not paying on time.
When you shop online with a pay later mindset, you often forget that payment is due someday.
Online shopping and payment platforms like Amazon Pay, Paytm etc provide a special feature called pay later. This facility enables the user to make purchases on credit and the amount can be paid back 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 these apps have some advantages, many people are unaware of their disadvantages.
If you are one of those people who use or plan to use pay later feature or apps, these pointers may prove useful to you:
habit of buying junk
When you shop online with a pay later mindset, you often forget that payment is due someday. This means that people do not have any problem in buying extra or expensive items when the money is not debited in real time. So over-buying becomes a bad habit.
late payment penalty
Sometimes, our salary may get credited to us after a few days due to bank holidays or other reasons in a particular month. This can lead to apps charging hefty late fee charges for not paying on time. So, while the credit amount will already impact your monthly budget, the additional late fee will further worsen your monthly expenses.
Credit score can drop if there is a delay in payment
People often forget that every credit system affects the credit score. While you may not realize it, late payments not only lead to additional penalty charges but also affect your credit score. While lowering a credit score is relatively easy, raising it back to an optimal level to be able to avail loans in emergency situations is a very difficult task.
Keep these points in mind whenever you plan to opt for paylater services on any platform. Carelessly opting for this feature can put a huge dent in your finances.
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