Retail giant Walmart is forming a partnership with fintech startup One. Together, they are introducing a ‘buy now, pay later’ service that will allow customers to split payments on purchases from $100 to $3000.
The interest rates will range between 9.99% and 35.99%, depending on the buyer’s credit score- the better the score, the lower the rate. The specifics of where this service will be used have not been disclosed. This move follows the growing trend of installment payment systems in the retail sector.
‘Buy now, pay later’ schemes are becoming increasingly popular. They cater to consumers dealing with high inflation rates, high-interest rates, and rampant student loans. The last holiday season witnessed a significant upturn in the use of these services, contributing to a 42.5% increase in Cyber Week sales.
However, consumers are cautioned to tread carefully while using these payment plans.
Walmart and One’s collaborative payment service
Defaulting on payment could have serious consequences, such as debt accumulation and a negative impact on the credit score. Financial experts recommend strict budgeting, reading terms and conditions carefully, and seeking financial advice before opting for such payment methods.
Financial planner Martha Callahan advises consumers to understand their financial boundaries to avoid falling into debt traps. She emphasizes the importance of budgeting, financial discipline, and maintaining a good credit score.
Affirm, another of Walmart’s partners, may offer special 0% interest rate options on select items. Consumers should remember that these low APR offers are limited to specific items and durations. It’s advisable to review the terms and conditions thoroughly and always check the current promotional details before purchasing. Responsible usage of these financial options can be beneficial, but missteps could result in added costs that significantly impact budgets.
