Buy Now, Pay Later (BNPL), is a payment method where individuals can buy anything by opting for this. This mode of payment allows one to pay later after purchase. Here’s the catch, failure to make payments can often harm one’s credit score.
Overall, this only increases one’s purchasing power. The individual needs to make sure that once BNPL is approved, they clear the debt before the debt collectors start hovering over their heads.
In the long run, this will help them in having a good credit score.
One such case is Nadhea Putri (name changed) who lives in Kuala Kapuas, Central Kalimantan, which is 1,600 km from Jakarta. For a very long time, she wanted to purchase a newer model of a smartphone but was not able to afford it.
Earlier in 2022, the 21-year-old got to know about the BNPL which was being offered on the checkout page of her favorite online shopping app, Shopee.
It took her less than 24 hours to get approved into the scheme, all she had to do was, scan her credit card which got her activated and make the purchase using SPayLater.
She had never thought she would be able to buy her dream smartphone which costs five times her monthly savings.
Four months later, she is still struggling to pay back the loan along with the interest which is increasing with each passing day.
In a conversation with Al Jazeera, Nadhea mentions how she is now scared to even use the new phone. Every day, she gets calls from debt collectors more than 20 times.
When contacted by Al Jazeera, Shopee opted not to comment.
While the scheme might seem alluring to people initially, it definitely has cons which people get to find out only after they are mounted with a serious amount of debt.