Just because you have poor credit doesn’t mean your online shopping experience has to be ruined. You can still buy the things you love, even if your credit rating isn’t as high as you’d like it to be. However, in the long run, it does really make sense to put some time and attention into improving your credit.
So, if you have less than perfect credit, what are your options for purchasing online?
The Buy Now, Pay Later Option
Let’s say you wanted to buy an Apple iPad 2. Instead of shelling out the cash upfront, you can simply choose to buy now and pay later.
Instead of paying a lump sum of $399, you can instead pay just $15.53 a month for 36 months. On the other hand, if you choose to pay it off sooner, you can be all done with your payments in 12 months if you’re willing to pay $45 a month.
Buy now, pay me later is essentially an installment loan program that allows you to pay for products you buy over time, rather than all at once.
Bill Me Later
This works rather similar to the above option. Instead of getting billed right away for your products, you get to delay payment.
For example, Walmart offers a 90 day no payment period when you use their Bill Me Later service. That means you can own whatever it was that you wanted to buy for three whole months before you have to start making payments.
After that, the payment schedule works a lot like the Buy Now, Pay Later options.
If you’re buying furniture online or expensive electronics, stores will often allow you to pay in installments. Sometimes these installments won’t even have interest!
The Pros and Cons of These Options
There are a few pros and cons you should be aware of with these kinds of buying options.
The obvious benefit is that it increases your buying power. You might not be able to afford $1,000 today, but you can certainly afford $30 a month. You can get the things you want to get, without being bogged down by your credit.
The downside is that these kinds of loans can usually only hurt your credit rather than improve it. Most of these kinds of programs do not report to the credit agencies unless you’re delinquent.
In other words, you get hurt if you’re late, but get no benefit if you’re early.
Also, these kinds of programs can really hurt you by pushing you further into debt. If you already have high levels of debt, think twice before using such a program.
Other Options Available to You
If you’re making a major online purchase, consider using Peer to Peer lending sources like Prosper.com to get funding. You’ll get a much lower interest rate and you can actually improve your credit.
Alternatively, consider making your payments via a secured credit card. A secured card won’t increase your buying power, but it’ll increase your credit score in the long run.
Online shopping with bad credit isn’t difficult – You just need to know where to look.