'Buy Now, Pay Later' programs can be tricky to use

ATLANTA - Christmas spending this year is predicted to rise over last year but only modestly. Paychecks, for many, have not been keeping up with inflation. So, this has many looking more closely at the "Buy Now, Pay Later" options. These can be helpful, but only if you do it right. 

"Buy now, Pay later" defines itself in its name. You buy the item and can get it right out of the gate, but you are doing so on a payment plan. But it's the payment plan that must be strictly followed. If you get off track, then you pay a lot more than the item actually costs. 

With many online purchases today, you see this "Buy Now, Pay Later" option with offers from Klarna, Affirm, Paypal and others. These third-party companies actually manage the payment, not the retailer.

Members of the public pass by a floor advertisement for tech firm Klarna, an ecommerce company which allows users to buy now, pay later, or pay in instalments. (photo by Daniel Harvey Gonzalez/In Pictures via Getty Images)

Let's look at the pros and cons. First, you can spread out your payment for a purchase. Second, if you do it right, there are often no additional fees for using this option. Third, generally, it does not require a credit check.

Here are the cons of "Buy Now, Pay Later" plans. If you miss a scheduled payment, it'll cost you fees or finance charges on that unpaid balance. If you don't pay the fee, this will impact your credit negatively. And if you don't have the money in your account, then you will see pricey overdraft charges rack up. Also, those payments can be awfully close together. They come up fast.

So these plans can help you fill out your Christmas lists, but truly, you must take this payment plan very seriously.