Buy now, Pay later... really?

wezwee

Hi, I am a student about to start an IT software course (though you don't need to know that) but basically I caught my eye on a new computer system online which will be great for... studenty stuff...
But I've seen codes for a "Buy now, Pay later" deal untill April 2009. But I have no idea how this works as surely it cannot be "pay absolutley nothing now untill next year"
I've read on other sites that offer BNPL deals that there's usually an "administration fee" which I dont mind paying, buy if I could keep my student loan for an extra year to gather interest & such, that would be great.

Can anyone please else explain to me how this works?

From what I gather so far;
- You buy the item,
- You receive the item,
- You pay no interest if you complete payment by April 2009,
- If you havn't completed payment by then, there's like 32.4% APR to pay?

I just have a doubt in my mind that they will practically give you something for nothing, of which you dont really have to pay for until next year!?!
*confusion argh*

Thanks in advance for any help!

CLAPTON

what is the price of the computer and can you buy it cheaper elsewhere... nothing is for nothing

pavlovs_dog

in my experience you pay over the odds for a low spec computer when you buy through a catalogue. you will probably get more for your money if you buy from a reputable PC/laptop company or retailer, even if that does mean paying in full up front

wezwee

I know I can find cheaper systems elsewhere (like Novatech)
but I'm not just specifically asking about Littlewoods, i'm asking about all Buy now Pay later deals in general.

---

Edit:
OOO okay, Novatech actually does do a Buy Now Pay Later deal, I never noticed this before. I pay £25 for the administration fee, and a 10% deposit, and don't have to pay anything for 9 months.
But I've been told that when you do this it affects your credit history or something? Something about showing me as being in debt? Or is that a load of poop?

Paulos77

buy now pay later deals are usually quiet good if you will definelty have the cash to pay it off before the deal runs out, otherwise if you dont pay by the date they will clagg huge amounts of interest on if you start paying monthly after that.. Also you usually pay a fee for the deal aswell.

Last year I bought a LCD TV with a buy now pay 9 months later deal. I paid £25 extra though to take it out. Worked out the same or cheaper than other places so i wasn't losing out.

CLAPTON

lets take an example

suppose computer costs 400
deposit 10% of 40 leaving 360
25 fee
interest free if paid in 9 months

so equivalent interest rate is (25 / 360) x 12/9 = 9.26% (not really free!)
and that assumes the product is not overpriced

of course many people forget to pay within the 9 months and are then stung for interest from the original date of purchase

the wonders of maths

St8_2

How much is the computer?

Because if you have the money to pay for it and the only reason your holding off until next is because you want to earn the extra interest, then anything under £1500 isn't really worth it surely? This time next year you will have to pay for your computer which will probably be half the price in the shops then.

As for buy now pay later deals, they are generally good. Apart from the possible admin charge theres no catches. Like any other marketing tactic, they hope you wont have the money next year so you will have to pay the sky high interest, and it also makes you more likely to buy loads of stuff now. Act now - worry about the consequences later sort of thing!

wezwee

St8 wrote: »

How much is the computer?

Because if you have the money to pay for it and the only reason your holding off until next is because you want to earn the extra interest, then anything under £1500 isn't really worth it surely? This time next year you will have to pay for your computer which will probably be half the price in the shops then.

Yeah, assuming I want a £400 computer and only have £400 in the bank gathering interest now... and for a student, anything that keeps my money is worth it heheh :P

@ CLAPTON - surely I'm only paying £425 for a £400 computer, not £443-ish? Or have I gone horribly wrong at calculating your numbers?
--- Edit: Yeah I did the wrong calculation... *slaps self* but its still only +£25

Helix

We did one from eBuyer last year. Didn't have to pay any admin fees but we did have to pay extra for delivery which would have been free if we didn't get it on buy now pay later. We made sure we paid on time and didn't have to pay a penny extra.

Millionaire

Dell do "buy now pay later" deals as well. Charge an admin fee of around £49 if you pay it of in full.

I done it in the past.

CLAPTON

wezwee wrote: »

Yeah, assuming I want a £400 computer and only have £400 in the bank gathering interest now... and for a student, anything that keeps my money is worth it heheh :P

@ CLAPTON - surely I'm only paying £425 for a £400 computer, not £443-ish? Or have I gone horribly wrong at calculating your numbers?
--- Edit: Yeah I did the wrong calculation... *slaps self* but its still only +£25

I dont understand you

if you are saving £360 for 9 months at say 6% (I assume you have registered a R85) you will 'only' gain £16.20 in interest but it costs you 'only' £25... why give away £8.80 and assume the risk of forgetting to pay on time