Buy now, pay later debt across providers

Pay later is credit that does not look like credit. At checkout it sits next to bank transfer and card, you select it, the order goes through, and at that moment a contract exists. There was no application, no appointment at a bank, no signature and no wait for a decision. If the open amounts do not come to mind later but the orders do, that is not carelessness on your part: the payment method is built so that it never slows a purchase down, and a contract that slows nobody down leaves no memory behind. It is counted all the same. It sits as a claim in the books of the provider, it has a due date, and on a longer instalment plan it has a rate. What is missing is the one place where all of these contracts appear together. The three variants that look alike at checkout differ on exactly that point, and the difference decides what an item ends up costing you.

Three shapes behind the same payment method

Payment in a few weeks

The whole amount falls due after a short deadline, as a rule without interest. This shape only costs money once the date passes.

Split into a handful of instalments

The purchase amount spreads across a few dates, often without interest. The plan runs to its own calendar, whatever happens to the goods.

An instalment plan over several months

A consumer credit with a term and a rate. The annual percentage rate is in the pre-contractual information you were given at checkout, not in the purchase list in the app.

Why the total is nowhere

Every provider shows its own items and nothing else. The Klarna app holds the Klarna purchases, PayPal holds the PayPal instalments, and anything that ran through a shop checkout under the name of the shop itself is only in the customer account of that shop. Inside one app the view is usually one purchase per screen, with the item, the balance and the next date. A line showing everything open at that one provider is rare, and a line across all providers does not exist. Three places each hold one piece of the information: the shop knows what you bought, the payment provider knows what is still open, and your bank sees a direct debit with a reference that often names neither the shop nor the item. With two providers this barely registers. From the third on, the picture goes missing because of the scatter rather than the size, and the total only forms once you put the three sources side by side.

Two costs that are not interest

On the interest-free shapes the credit itself costs nothing, and there are still two ways for money to be added. The first is the date that has passed. From then on the provider charges a fee per reminder, set out in its terms of use, and the stage after that is a hand-off to a collection agency whose costs are added on top of the claim. Fees do not grow with time, they land in one step, so an interest-free item shortly before a reminder is dearer than an interest-bearing one that is running to plan. The second way is the return with no refund. You send the goods back, the shop accepts them, and the payment plan at the provider carries on, because the provider learns nothing about the return until the shop reports it. So instalments keep leaving your account for something you no longer have, and if you stop them at your end, the amount turns into an open claim with a reminder attached.

• The plan does not end with the return. It ends when the provider has booked a refund or a cancellation.
• Report the return in your account with the provider, not only with the shop. The apps carry a function for this on each purchase, and only that entry reaches the place holding the due date.
• Write down the date of the return and the tracking number. You need both if the refund does not arrive and you want to dispute the claim.
• Do not simply stop paying while nothing has been booked. Until the refund lands the amount is an open claim, and a withheld instalment triggers the same reminder stage as a forgotten one.
• A cancellation at the shop and the unwinding of the payment plan are two separate events. The first is quick, the second waits for the shop to report it to the provider, and weeks can sit in between.
• Once the refund lands, check that the item in your provider account really reads zero. A partial refund leaves the remainder running, and the remainder has a date of its own.

Every provider on one list

• Go through every app and every customer account you have ever paid later with, and write down each open purchase separately.
• Give every item three entries: balance, next date, rate. On the interest-free shapes the third field stays empty, and that is information too.
• Include the shop checkouts where the instalment plan runs under the name of the shop. Those items appear in none of the well-known apps.
• Read the last few bank statements and look for direct debits you cannot match to anything on the list. That is the fastest route to what memory left out.
• Add everything at the end that is not pay later: overdraft, credit card, bank loan, phone contract with a financed handset.
• Add up the monthly amounts. That figure is the part of your income already committed before the month starts.

Find a counselling centre, BAG-SBWhen the monthly amounts together are larger than what is left at the end of the month, the question is no longer order, it is negotiation. The German federal association for debt counselling runs the directory of recognised centres, and advice there is free of charge.

Getting help with debt, Consumer Financial Protection BureauWhere to find a non-profit credit counsellor in the United States, what a first session covers, and how to tell a genuine service from one that charges for the introduction. It does the part no app can.