Seeing a "buy now, pay later" option offered at checkout can be tempting for travelers. But is it worth it?
"The short answer is don't do it," said Clint Henderson, a travel expert at The Points Guy. "All the airlines offer some form of 'buy now, pay later' now, so they're all getting in on the act. You know, this is free money for them."
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WATCH HEREThese point-of-sale loans give consumers the ability to make installment payments over a fixed period of time. But as simple as it sounds, the drawbacks can be costly.
"Even though some of these buy now, pay later loans don't have interest rates, or high interest rates, some of them do, and some of their fees can actually translate into roughly on par with the interest rates credit cards charge," said John Kiernan, a managing editor at WalletHub. "You shouldn't assume that there are going to be no repercussions for your credit score."
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As much as these loans feel like a way to spread out travel, "stacking" them can add up. And they don't always come with the same consumer protections.
"It's a slippery slope when you start doing buy now, pay later for food delivery orders, or even a vacation," Kiernan said. "It makes it really hard to keep track of it all and figure out where your money's going and how much you have left."
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Travel experts recommend saving money by setting up price alerts for flights and taking advantage of any summer offers.
"People are generally kind of stressed about their finances, but really in need of a vacation anyway," said Kiernan.
"This is the first time in about five years that prices are actually down year over year for the peak summer travel season," explained Henderson. "Usually, this is the time when I tell people, 'you sort of missed the window for booking summer trips,' but I'm seeing a lot of deals out there, and it is because of softening demand. The airlines have warned that they're selling fewer seats, and so that means prices are lower for consumers."
Instead of doing a buy now, pay later plan, both Henderson and Kiernan agree that using a travel credit card could unlock more value and benefits, when used responsibly.
"You're much better off opening a credit card that's going to give you a statement credit and a big signup bonus," said Henderson.
"You can save, easily, $1,000 per year with those rewards," explained Kiernan. "If you don't need to borrow, go for credit card rewards. If you need just a little time to pay, buy now, pay later is great. And if you need longer [time], several months, go for a 0% credit card."
