Skip to Content

BBB voices concern about installment paying options

BBB Better Business Bureau logo
Better Business Bureau

PORTLAND, Ore. (KTVZ) -- As back to school shopping starts to ramp up, many online shops are offering installment payments that target both high school and college-age buyers.  Particularly, as COVID-19 has put pressure on consumers’ pockets, breaking up payments has become a more attractive way to spend.

As with any financing option, Better Business Bureau Northwest + Pacific encourages consumers to do some research before signing up. Not only do consumers need to be wary of installment services that charge hefty interest rates, but there are also cyber-risks associated with some of these third-parties.

As you start the checkout process with an online store, you might notice that in addition to the option to pay with a debit or credit card, you can choose to pay for your purchase in a specified number of installments. Popular servicers are AfterPay and Klarna.

These third-party financing companies make money by charging retailers a small percentage of each sale made through their financing options, and by collecting late fees and interest from consumers if each installment is not paid on time.

Interest rates on pay in installment purchases can range between 0% to 30%, depending on your credit history and the retailer. Installments can last for as little as a few weeks or as long as 39 months.

Cybersecurity is also a potential issue here. While the retailer you’re using might be secure, that does not mean the third-party servicers website is, too. A Better Business Bureau employee recently had her card hacked and fraudulent purchases were made totaling $400 when she placed an order using AfterPay on a popular clothing website.

If it can happen to a BBB employee, it can happen to the average consumer.

Better Business Bureau Northwest + Pacific offers these tips:

  • Don’t forget you are borrowing money. Even though many installment payment services come with only a few small payments and zero-percent interest, it’s critical you keep in mind you are still borrowing money to enjoy a product before you’ve paid for it in full.
  • Stick to your budget. Think about how bi-weekly or monthly payments could affect your budget – even if the payments seem small.
  • Read the fine print. Before you sign up to pay in installments, be sure you understand exactly how the service works. Find out what company is financing your purchase, how long you have to pay off the purchase and in how many installments, how they handle late payments, and how much interest you’ll be charged, if any.
  • Get to know the financing company. If you do decide to take advantage of an installment payment plan, look up the financing company on to make sure they are a reputable company with honest business practices.
  • Know how your credit could be affected. Keep in mind that unpaid debts can be sent to collections agencies and after a delinquent period of 90 days can be reported to credit bureaus. This could have a negative impact on your credit score.

More information on how you can safely buy and sell items online is available now at  Find information on businesses you can trust by going to that include business profiles and reviews.

Article Topic Follows: Community Billboard

Jump to comments ↓

KTVZ news sources


KTVZ NewsChannel 21 is committed to providing a forum for civil and constructive conversation.

Please keep your comments respectful and relevant. You can review our Community Guidelines by clicking here

If you would like to share a story idea, please submit it here.

Skip to content