Buy now pay later

Buy now pay later is an arrangement that lets you take home something you want immediately and settle the cost later in regular payments. The payments may be interest-free or carry additional fees depending on the product and provider. In modern markets, specialized apps offer this at the point of sale, making it a quick option alongside paying in full or using a credit cardTermCredit card×بطاقة ائتمانA card that lets you borrow money to pay for purchases now and repay the bank later, usually with interest.Open the term.

The installment is free to you because it is not free to the shop. The provider takes a shareTermStock×السهمA share of ownership in a company, bought and sold on a stock exchange, that may pay dividends and rise or fall in value.Open the term of the sale price — typically a few per cent, more on smaller baskets — and the shop accepts it because splitting the price sells more, and sells more expensive things. That is the arrangement, and it is why "no interest" is both true and beside the point: the cost sits inside the sticker price, paid by everyone, including the customer who settles in full at the till.

The risk to you is not the fee. It is that each plan is small enough to approve without thinking, and nothing shows you the total. Four plans of 200 a month each, opened in four different shops in four different weeks, is 800 a month committed — a figure you would have refused outright as a single loan, and one that no app, statement or bank ever puts in front of you in one place.

So the number that matters is not the installment. It is the sum of every installment falling due next month, and you have to add that up yourself.

• Interest-free installments are not cost-free: administrative fees and late charges are where the provider earns from you rather than from the shop.
• Wherever a credit file exists, a missed installment on a small purchase marks it the same way a missed loan payment does.
• Keep the total of your live plans written somewhere you will see it before opening a fourth. Nothing else holds that number.
• Some Islamic products offer installments through murabaha or ijara structures instead of interest, but the underlying mechanism of deferral remains the same.