![]() If you do, you lose the protections you get from using the credit card while also opening yourself up to owing interest to the card company. Lauren Saunders, associate director at the National Consumer Law Center, advises borrowers to avoid linking a credit card to buy now, pay later apps whenever possible. Apple's protections are offered through Mastercard. Companies can offer protections, but they don’t have to. That means you could find it more difficult to settle disputes with merchants, return items, or get your money back in cases of fraud. In the U.S., buy now, pay later services are not currently covered by the Truth in Lending Act, which regulates credit cards and other types of loans (those paid back in more than four installments). Several services allow users to defer payments in this way. If a user wishes to defer payments, or set up a different payment plan, Apple said they can contact support. In Apple's case, the company said there will be no late fees, either flat or as a percentage - only the possibility of missed payments reported to credit bureaus, and a loss of access to the loans. If a customer misses multiple payments, they may be shut out from using the service in the future, and the delinquency could hurt one's credit score. These can run as high as $34 plus interest. The services generally don’t charge more than a customer would have paid up front, meaning there’s technically no interest, so long as one makes the payments on time.īut if a customer pays late, they may be subject to a flat fee or a fee calculated as a percentage of the total owed. ![]() Unauthorized vapes pouring into US despite FDA crackdown on fruity flavors Instead, missed payments will eventually result in the consumer losing access to these kinds of loans. Companies like Afterpay, Affirm, Klarna, and Paypal already offer the service, typically with late fees for missed payments and the option to use a credit card or bank account to make installment payments.Īpple's version, which is integrated with Apple Pay and facilitated by MasterCard, will require the consumer to use a debit card and a bank account to make those payments, the company said, and will not charge flat or percentage late fees. If you shop online for clothes or furniture, sneakers or concert tickets, you’ve seen the option at checkout to break the cost into smaller installments over time. Since the start of the pandemic, the option to “buy now, pay later” has skyrocketed in popularity, especially among young and low-income consumers who may not have ready access to traditional credit. The company will roll out the product to some consumers this spring, and will begin reporting the loans to credit bureaus in the fall. Apple is getting into the buy now, pay later space with a few tweaks to the existing model - including no option to pay with a credit card.
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