What's the real cost to buy now and pay later?
Emily Marrison  Columnist  Over the past 15 months, most of us likely made more online purchases than ever before. According to Lizzy Hillier of Econsultancy.com, global ecommerce sales rose from 16% to 19% of all retail sales. Walmart alone saw U.S. ecommerce sales increase 37% from first quarter 2020 to first quarter 2021. Lots of analysts are trying to figure out what this means for the future of online sales compared to in-person shopping. One thing that is very likely, even if online sales decline, it will not be to pre-pandemic levels. While making more purchases online, you may have seen additional payment options at the checkout. Besides the usual option to enter your credit card information, there are often options to select a point-of-sale loan, commonly referred to as a buy now, pay later payment plan or POS financing. We have heard these for years during our favorite infomercials, only 4 easy payments of $29.99. It sounds much more appealing and more affordable than $120. Here are some things to consider before you select this payment option. The first step is to create an account with the lender. There are several available, but some of the most popular are Affirm, Afterpay, Klarna and Quadpay. These firms partner with specific retailers, so chances are there will be only one available at check-out. The application process is pretty simple. It includes basic personal details and usually involves only a soft credit check that will not impact credit score. You have options to pay with a credit card or to link a checking account to directly make the payment. The terms for installment, like four payments every two weeks for two months, will be established when you check out. The payment options available depend on the POS company. If you do not have a credit card and you are trying to build credit history, then a POS loan may help. Some companies will report your payment information to credit bureaus. This could be useful for someone with a low credit score due to a thin credit file, typically a young person, or for someone who is struggling with a poor credit score looking to improve. In some cases, the interest can be as low as zero or as high as 30%. This is where doing a little homework can be beneficial. Sometimes the no or low interest rate companies may charge late payment fees. Technically no. That may not be what you expected to hear. However, the main warning is to understand why this system is appealing in the first place. It is all about brain games. Breaking a large payment into a few smaller payments makes us feel like we are paying less. This is fine until that false reality causes us to spend more on a retail site than we should, only because we have the option to pay for it over two months or more rather than in one lump sum. It is using our affinity for procrastination to encourage us to spend more in the long run, even if it seems like less at the time. Today Ill leave you with this quote from Christopher Parker: Procrastination is like a credit card: its a lot fun until you get the bill.  Emily Marrison is an OSU Extension Family & Consumer Sciences Educator and may be reached at 740-622-2265.