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Delaying Payment with BNPL: Understanding the Interest and How to Avoid It

When using Buy Now, Pay Later (BNPL) options, it's essential to understand how interest works, especially if you're not planning to pay the full cash price before the end of the delayed payment period. In this article, we'll break down what happens when you use BNPL and how to avoid paying interest on your purchases.

What Happens When You Use BNPL?

If you haven't paid the full cash price or have only made a partial payment, a lump sum of interest will be charged to your account. The outstanding balance, including the interest, becomes part of your payable balance and attracts interest at your account rate, meaning you'll pay interest on top of interest.

How Do I Make a BNPL Payment?

To make a full or partial payment, simply log into your account and allocate your payment to the specific BNPL you wish to pay off. Remember, if you choose not to pay the cash price before the end of the delayed payment period, a lump sum of compound interest will be charged to your account.

How to Avoid Paying Interest?

The best way to avoid paying interest is by paying the full cash price before the end of the delayed payment period. This can be done in one full payment or multiple partial payments. By doing so, you'll avoid paying interest on top of interest and save yourself from unnecessary charges.

How Is Interest Calculated?

Interest is calculated from the date of order and compounded daily. This means that if you haven't paid off your balance by the end of the delayed payment period, you'll be charged a lump sum of interest at the end of the period.

Eligibility and Offers

BNPL offers can vary depending on your account status and spend. Eligible customers may choose from options like 6 months or 12 months delayed payments when spending £50 or more respectively. The delayed payment period starts from the date of order, including pre-ordered items and those not ready for immediate dispatch.

When using BNPL, it's crucial to understand how interest works and plan your payments accordingly. By making timely payments or paying off your balance in full before the end of the delayed payment period, you can avoid paying unnecessary interest charges. Remember to log into your account to make payments and review your offers and eligibility for BNPL.

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