As you did your online shopping this holiday season, you may have noticed a “buy now, pay later” option when checking out. More and more websites are offering these services to their buyers, and while they appear to be a great option for making bigger purchases, it is important to understand the risk involved.

While these services might charge you low or no interest, that doesn’t mean the plans are risk-free. Oftentimes, the plans charge high late fees, change fees, or per-transaction fees. It is also important to note that some of these services have the ability to report your payment history to the three nationwide credit bureaus. Missing a payment or making the payment late could go as far as to do damage to your credit score.

So, before you opt-in to “Buy Now, Pay Later” here are some questions to ask:

• Are there interest charges or fees?
• What happens if I miss a payment?
• Will the plan provider report my payments to the credit bureaus?
• Are there reviews on this provider, and what do the reviews say? 

Want to buy now but pay later? Read this first | Consumer Advice (ftc.gov)