If you’ve shopped online recently, you’ve probably seen the option to pay in installments through services like Klarna, AfterPay, and Affirm. Usually there is no credit or interest check, and no fees if you pay on time.

This system is good for those who don’t have a credit card and need to spread out their payments, says Michelle Singletary, personal finance columnist for the Washington Post. She gives the example of a student trying to get a computer, but who does not qualify for a credit and whose parents are short of money, so it is useful if the student can pay gradually through the income from a part-time job.

But it’s problematic for those who don’t control their spending. “Breaking it up into these smaller payments makes it more affordable. But when you add it all up, it’s not. … [Companies] know that people will buy more if they think, “Oh, it’s only going to be $25 for four times?”

She says traders know that an online shopper may only have enough money for one pair of shoes, but if they are allowed to pay it in four installments, they may think they can buy three pairs. shoes instead, which means more sales for the company.

Meanwhile, a legal action is unfolding around it. A northern California district court filed a lawsuit against Paypal over its “Pay in 4” installment plan, and other states filed class action lawsuits against Klarna and Affirm. Singletary says lawsuits typically argue that companies don’t disclose potential bank charges — such as overdraft fees when you don’t have enough funds to make monthly payments.

She adds that some consumers say they’re still being charged for items they’ve returned, and there’s a dispute over who’s supposed to make sure that doesn’t happen (the buy-it-now companies or the merchant). selling the goods).

Singletary’s advice: Save enough money to pay for the items in full.

You can also add goods to your online shopping cart and leave them there for a while, rather than paying immediately. It’s to see if you really want them.

Singletary reminds people to be especially careful as the world is still emerging from the coronavirus pandemic – people may have returned to work, but they have lost income and are trying to catch up. Moreover, inflation is at its highest level in 40 years. So with the higher cost of essentials like food and gas to get to work, be more mindful of optional/discretionary expenses.

“Really think about whether you need it or not, because you might need that money later for something else. There are all sorts of things that could happen.