Lesson 4 of 4 · 6 min read
The traps: IFNs, shopping cards, BNPL
“Buy now, pay in 4 interest-free instalments” sounds harmless. See why these products can quickly become expensive if you don't understand them fully.
IFNs (non-bank financial institutions) offer loans faster and on looser conditions than banks, but usually at a much higher DAE. They aren't automatically “illegal” or “scams”: they are regulated. But the real cost is often much higher than the monthly payment makes it look.
Shopping cards
Many shops offer “buy now, pay in interest-free instalments” through co-branded shopping cards. The promotional (interest-free) period may be real, but if you don't pay in full on time, the retroactive interest or the interest applied after the promotional period can be very high. Read explicitly what happens AFTER the promotional period.
BNPL (Buy Now, Pay Later)
“Buy now, pay later” services (four instalments, for example) seem free if you pay on time. The real risk: normalising purchases as “small, invisible debt”, split across several BNPL services at once, makes it hard to see the TOTAL sum committed in instalments, and it is easy to lose track.
Warning signs
Pressure to buy quickly (“today only”), terms that are hard to find about what happens if you pay late, or using BNPL for everyday expenses (not occasional ones): these are all signs that it is worth stopping and recalculating.
In short
- IFNs are regulated, but usually with a higher DAE than banks.
- With shopping cards, always check what happens AFTER the promotional period.
- BNPL split across several services at once can hide the total sum committed.