Buying Big Ticket Items on Amazon Just Got a Whole Lot Easier
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Thanks to Amazon’s recent partnership with Affirm, an online payment plan service primarily featured on and used for shopping online fashion brands, the behemoth retailer will offer flexible payment options on its site that allows shoppers to split the cost of their larger purchases into monthly installments without racking up fees or interest.
While the new “buy now, pay later” feature is currently in the early stages of its rollout on Amazon and is only available to select customers, Amazon plans to make it more widely available to their full customer base in the coming months.
Why Is Amazon Adding Affirm Payment Plan Now?
The addition of the new installment plan service may signal that Amazon is ready to focus on shipping customers more than just shampoos, charger cords and $15 jars of Aztec Healing Clay. Affirm is known to help retailers increase the amount in checkout baskets and Amazon could be looking to sell more items at higher price points (Oculus VR, TVs, headsets, exercise equipment).
The payment installment option could help Amazon push in the larger home goods and appliance markets (like power tools, furniture, mattresses) and possibly redirect business away from traditional big-box retailers (Walmart, Home Depot and Target) into seamless online purchases you can order with your voice (just ask ‘Alexa’).
Amazon’s new move into the pay-later arena also marks an overall shift as younger generations move toward alternative lines of credit, though there are definitely still pros and cons to using any sort of loan that ought to be considered before diving in.
How Does Amazon’s New Buy Now, Pay Later Feature Work?
The new pay-later option is simple — customers can choose to split their purchase of $50 or more into smaller, monthly installments instead of fronting the whole cost at once. With the help of an app or the Affirm site, users can keep track of what they owe and when they have to pay, with no penalties for paying off the purchase earlier than the original plan.
According to Affirm, the new payment feature, for now, will only apply to Amazon categories such as furniture, electronics and apparel, and will not be available for grocery purchases, including those from Whole Foods. You won’t get your purchase any later than usual when using the feature, so there’s no need to worry about having to pay off the entire cost before you receive your order.
Benefits of the Buy Now, Pay Later Feature
An Alternative for Students and Those Who Want to Avoid Credit Card Debt
The absence of interest rates is a big selling point for the feature, as Affirm noted that some of the Amazon customer loans will bear interest, but some will be available at 0% APR. Younger populations have appreciated the ability to pay off their purchases with no interest, finding the option to be more reliable than credit cards and the high interest rates they come with. And if you choose to make a purchase that does include interest, that will be made clear from the beginning.
No need to worry about falling into debt in the same way that credit cards often string you along with hidden costs and fees down the line.
Perfect For Parents and Families to Shop Now for the Holidays
Parents and people on a budget could also benefit from using the feature in advance for the holidays, as Affirm makes it easier to get shopping done in advance without having to worry about emptying out your wallet in one fell swoop. Affirm markets itself as a more attractive alternative to credit cards, as they are never any hidden or late fees, so you know exactly what you will owe and when right from the start.
Ideal for Building a Tool Collection, Buying Fitness Equipment or Launching a Home Improvement Project
Having the ability to pay off large ticket items over time but use them immediately is a benefit hard to resist. From power tool deals, to camping gear, exercise bikes or even kitchen-ready 4-piece appliance sets, Amazon sells them all and is constantly adjusting prices down to be the most competitive in the market.
What is Affirm?
Buy now, pay later companies like Affirm found enormous success since the start of the pandemic in early 2020, and have since been in high demand, with the company’s own customer base growing over 60% just within the past year. It looks like their success isn’t stopping anytime soon — following Affirm’s partnership with Amazon, the company saw its stock skyrocket by 48%.
Consequences to Be Aware of If You Skip a Payment
Though there are plenty of advantages to using a buy now, pay later feature, don’t just jump right into the appeal with a major purchase you aren’t prepared to pay off. Failing to pay off your monthly installments with Affirm could result in the company reporting your delinquency to credit report companies like Experian and possibly lowering your credit score.
The buy now, pay later feature isn’t a fix-all solution for getting out of paying full price for Amazon products, but it can be a good alternative if you’d rather split up your purchase into more manageable installments over time.
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