#money-tips | 3 min read

Buy now, pay later: what’s the best way to do it?

By TymeBank - 22 April, 2021

Want something now, but don’t have the money to pay for it? No sweat. Here’s a look at the payment options available to you. With TymeBank you can buy now, pay later.

You’d love to be so rich that you could stroll around paying cash for everything. (New clothes? Here’s a stack of money. New car? My assistant will do the transfer right away.) But the reality is, most of us have to consider some kind of credit option for some of our bigger purchases. As a consumer, you have a handful of options – each with upsides and downsides. 

Hire purchase for higher-value items

Also known as an instalment plan, this payment method is often used for expensive items such as motor vehicles. Here you’ll make a deposit (AKA down payment), and then pay the balance plus interest in regular instalments over a set period. In most cases, ownership of the item will only be officially transferred to you, the buyer, once all the payments have been made. (Until then, you don’t own your car; the bank does.)

Pro: For big-ticket items such as cars, hire purchase is often the only option for buyers.

Con: Beware of the interest. Over that roundabout six-year purchase period for a car, the overall cost could easily balloon to almost double the original sale price.

Lay-by – can you afford to wait?

This is all about delayed gratification. Lay-by also lets you pay off an item over a set period, but the retailer keeps the goods until you’ve paid the full price. Usually you’ll pay a deposit upfront, followed by regular payments.

Pro: If you can’t afford the payments, or if you change your mind about the item, the retailer has to give you your money back, minus a cancellation penalty of 1% of the purchase price. If you’re buying a R1,500 pair of shoes, for example, that means you’d only lose R15. (The penalty used to be 10%, until the Consumer Protection Act brought it down. If you’re charged more than 1%, the seller is breaking the law.)

Con: Only once you’ve paid in full do you get to take the item home with you. 

Store cards still going strong

Store cards are popular in South Africa, for many reasons. You’ll often get a sign-up discount on your first purchase, along with regular discounts and incentives throughout the year. You can also buy what you want when you want it, and then pay it off over the next few months.

Pro: If you’re responsible about how you use your card and don’t miss a payment, your store card can also improve your credit score, which will help to lower the interest you’re charged if you ever buy something on hire purchase.

Con: That’s the good news. The bad news comes if you miss a payment. Store cards are notorious for their high interest rates, and your credit score can be hurt badly if you don’t manage your account properly.

Be careful with credit cards

Some financial coaches love them, some hate them. How you feel about your credit card will ultimately depend on how you use it.

Pros: Credit cards are very useful and convenient, enabling you to make online purchases and mobile payments, and to go cashless for your day-to-day shopping. Your credit card is secure, it offers payment protection and it lets you keep track of exactly what you’ve spent where.

Cons: Again, the problems come when you don’t use your credit card wisely. Don’t use your credit card to pay off other debt; don’t use it to pay for things you can’t afford; don’t allow yourself to run up a massive debt; and don’t lose track of how much money you actually have in your account. Break those rules, and it’ll cost you.

Enjoy a lay-by without the wait with MoreTyme

MoreTyme is a buy now, pay later service that lets you pay for half of your purchase at the till point. The seller/retailer gets the payment in full, you get to take your purchase home straight away, and you then pay the difference to TymeBank in two equal payments over the next two months… The best part? It’s all interest-free.

How does MoreTyme work?

Let’s say you buy a pair of shoes for R1,000. You’ll pay R500 at the till, then after 30 days you’ll pay R250. After 60 days you’ll pay the next R250, and then you’re done! The payments will be automatically deducted from your EveryDay account, and there aren’t any fees (as long as you don’t miss any payments). Just like that, you double your spending power!Find out more about MoreTyme here or, to see if you qualify, open MoreTyme from your TymeBank banking app.

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