Shop and pay later payment method.

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IamMe18

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Has anyone noticed that since last year, new companies have been popping up where you buy something online and instead of paying the full amount, you make 3 or 4 equal monthly payments. Basically it's lay-by but you get your goods immediatly.

I think it's a good on paper but people are notorious for not following up on payments.

Buy Now Pay Later. Interest-Free. | Payflex

Payflex offers an online payment gateway solution to South African merchants that allows shoppers to pay over 6 weeks, interest-free.
www.payflex.co.za
payjustnow.com

Home - PayJustNow

payjustnow.com payjustnow.com
 
IamMe18 said:
I think it's a good on paper but people are notorious for not following up on payments.
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And this is exactly what they're counting on. The penalties for 'forgetting' are what makes this so lucrative for these companies.
 
r4nd0m said:
And this is exactly what they're counting on. The penalties for 'forgetting' are what makes this so lucrative for these companies.
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When you look at it like that, it makes sense. I think it's a win for both parties though.
 
I looked at it once, but spreading your purchase over 4 weeks isn't that long a term for me. 3 months+ and now we're talking.

4 weeks? Pfft. Just put it on the CC and pay it off at the end of the month so no interest occurs. No need for weekly payments and administrative headache.
 
IamMe18 said:
How so? Between this and store accounts or Mobicred, it is the better option by choosing the option with 3 months to pay it off.
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It's all about good financial habits.

Ideally you want to be able to leverage an institution's money without paying interest. That's the biggest win-win. Whether that be a bank or a store, if you can borrow money for free while being 100% confident in your ability to pay it back on time, every time, then why not?

These companies are counting on people to over-extend themselves and create mountains of debt. They monetize by targetting people who don't control their finances well.
 
r4nd0m said:
It's all about good financial habits.

Ideally you want to be able to leverage an institution's money without paying interest. That's the biggest win-win. Whether that be a bank or a store, if you can borrow money for free while being 100% confident in your ability to pay it back on time, every time, then why not?

These companies are counting on people to over-extend themselves and create mountains of debt. They monetize by targetting people who don't control their finances well.
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You do have a point. But at the end of the day, it provides another way to either shop within your means without having to really on credit or fall for their trap.
 
IamMe18 said:
You do have a point. But at the end of the day, it provides another way to either shop within your means without having to really on credit or fall for their trap.
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Unless it's a house or car you're already falling for the trap of buying something you can't afford if you can't afford to buy something for cash.
 
IamMe18 said:
You do have a point. But at the end of the day, it provides another way to either shop within your means without having to really on credit or fall for their trap.
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That's just it though, it's not within your means if you have to make use of a service like this.

The term is too short to justify any potential gains that might be had and the penalties too severe.

Only someone who does not have enough money or is already over-leveraged (desperate/naive) would take on more debt in this regard. When you take on too much debt, you will most likely fall short in paying back. Talking in general here, not you specifically.

Keep in mind financial institutions like these aren't necessarily out for your benefit. In fact I don't think they're out for your benefit at all. They target the ignorant consumer in order to pay fees and interest so as to turn a profit.
 
themba990 said:
Is this for your tv?
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I am in the market for a TV but I'll be paying it cash thank you very much, always have and always will. I see this as a benefit for those who use lay-by and have to wait 3/4 months to get their goods.
Why does everyone automatically assume anyone who asks about loans or credit cards wants to buy a TV?
 
IamMe18 said:
I am in the market for a TV but I'll be paying it cash thank you very much, always have and always will. I see this as a benefit for those who use lay-by and have to wait 3/4 months to get their goods.
Why does everyone automatically assume anyone who asks about loans or credit cards wants to buy a TV?
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Eish...
 
IamMe18 said:
Why does everyone automatically assume anyone who asks about loans or credit cards wants to buy a TV?
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I agree it's a tad harsh how we approach those that ask such questions, but you must understand that if said person knew enough about their finances and finance in general (which everyone should), said question would not need to be asked.

I guess we advocate for people to not go down the slippery slope of death debt...
 
genetic said:
Eish...
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I know how that looks. Let me clarify, I was browsing the Masons's website because they're currently having a sale and I noticed the Payflex option. Obviously I couldn't purchase the tv because I don't have a TV license and the one I was gonna use(my brother's)owes like 2k on it. So while I'm purchasing my own TV license I decide to look up what this Payflex was.
 
r4nd0m said:
I agree it's a tad harsh how we approach those that ask such questions, but you must understand that if said person knew enough about their finances and finance in general (which everyone should), said question would not need to be asked.

I guess we advocate for people to not go down the slippery slope of death debt...
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If you need to borrow the money, you can't afford it. Advising against reckless debt is a pretty good advice.
 
IamMe18 said:
I think it's a good on paper but people are notorious for not following up on payments.
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I started using payflex sometime last year and have done at least 6 purchases though them. It works for me - no fees (since I'm not stupid). It helps that they take payment and you do not have to "remember" anything. In my case it frees up $$$ in case something else comes along. It is a win-win.
 
I saw something similar with Rain.

I'm helping a youngster pay for Internet and somehow forgot to EFT money into the account that Rain debits the R250 from. Whe. I logged into the Rain account I got a message to promise to commit at the next payment run.

So trying it out, and I called him and he confirmed that he's online.

I thought its a nice gesture, especially in the current climate. And even more so for matriculants who need Internet access. Problem is that eventually all the accumulated months will have to be paid.
 
sorry to revive an old thread but do payflex, mobicred etc let you pay off the outstanding amount before the agreed period? also does this save you in the way of interest and fees?
 
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