The concept of buy now, pay later is a popular concept among teenagers and young adults at the moment, as it says in the name, is where you can buy things now with money that you don't have, and pay for it later.
How it works if you use Afterpay is you would pay for your product in 4 payments, the first being at the time that you buy the product, and then each of the other payments spread out with 2 weeks in between each one, however you can pay for each payment any time before or on the due dates which are spread out by the 2 weeks, but if you miss the due date, then there will be a $10 late fee, and if you don’t pay for it during the 7 days after the due date, then another $7 fee will apply. That is a part of how buy now, pay later companies would make money, Afterpay also makes money through charging the store a fixed 30c transaction fee, as well as a commission of between 3 and 7%. A reminder that commission means you are paid a percentage of a sale’s value.
A few examples of buy now, pay later companies that you may have heard of are Afterpay, Zip Co, Humm, and Klarna.
An older version of this, which your parents may know about, is called lay-by, except it works in reverse: you would ask a shop to hold something aside for you, then you would pay for it over time, usually within 3 months, and only once you have fully paid it off can you actually receive the product.
My opinion on whether you should use buy now, pay later is that you don’t need to. If you do use it, then you risk paying the fees. Even if you think that you would be able to pay the appropriate amount in time, you would be better off waiting a few weeks and then buying the product when you have enough money, completely removing the possibility of paying fees.
Credit Cards
Credit cards are similar to buy now, pay later. Credit cards are like a small, short-term loan, they are a small contractual agreement between you and your bank, the bank will lend you a few thousand dollars to spend now, trusting you to pay it back later. To keep this agreement, you will usually have to pay a monthly fee to the bank. There is usually a deadline to pay the money back by, before you have to start paying considerable amounts of interest on the money that you still owe. The interest rate on credit cards is very high, between 15 and 20%, so you would want to make sure to pay the money back in time to avoid this. This interest can be compounded if you again don’t pay off the original sum and the extra interest in time.