Buyer Beware: Before you opt for the ‘pay later’ plan, Consumer Reports has a warning

If you’ve shopped online, you may have noticed a new option when checking out, a buy now, pay later plan. The offers sound enticing: Get your purchase home with no interest and no fees.

But Consumer Reports experts say there are some important warnings you need to know before you agree to that option.

Javier Chairez bought some golf gear last year and paid for it using a buy now pay later (BNPL) plan with a company called Affirm. There was just one problem.

“The retailer claimed that I received it. I didn’t. So, I started making phone calls,” Chairez said.

After contacting Affirm and explaining the problem, Chairez said he was surprised to learn that he was still on the hook for the weekly payments.

“I said, ‘You know, I’m not going to pay for this. I don’t have the merchandise.’ And I called Affirm, and I said, ‘Look, I don’t think it’s fair. Everybody has a recourse, except the consumer. I’m hung out to dry,’” Chairez said.

In a statement, Affirm told Consumer Reports, “We do our best to support all Affirm consumers throughout their purchasing journey, including assisting with return and refund issues as they arise.”

But Chairez isn’t alone. In a Consumer Reports survey, 28% of people who used a buy now, pay later service reported having at least one problem, such as being overcharged, or having difficulty returning a product or getting a refund.

While no-interest loans can be enticing, a low- or no-interest credit card might be a better option.

“Credit cards give you better protections on purchases that are damaged on delivery or never received at all,” said Consumer Reports Investigative Reporter Lisa Gill.

CONSUMER REPORTS: Avoid tricks and traps of Buy Now, Pay Later loans

For now, Gill says BNPL users should not overextend themselves. Try not to have more than one or two loans open at a time.

“It’s also a good idea to stick with just one provider, so you’re not forced to juggle multiple loans with multiple vendors,” Gill added.

And if you can’t pay on time, notify the company ahead of time because you may be able to reschedule a payment.

Consumer Reports also recommends setting up autopay to avoid late-payment penalties.