Before You Use Any Payment Plan

The checkout line or online shopping cart might be the first time you see offers for buy now, pay later, rent-to-own, lease-to-own, or layaway plans. They might seem like quick and easy ways to pay, but they all can come with unexpected costs and potentially affect your credit. If you feel pressured into signing up for a plan when you’re checking out, slow down. Ask some questions or do some research online to understand what you’re getting into.

What will I pay with interest and fees?

Depending on the payment plan, you might pay a little — or a lot — more. With some rent-to-own and lease-to-own plans, you might pay twice as much as you would if you paid with cash. If you wait a few months, could you save up enough to pay the full cost instead of using a payment plan (and paying more over time)?

What happens “if”?

What happens if things don’t go as planned? What if you pay late or miss a payment? Will you lose the item, or will it hurt your credit? If an item you’re renting or leasing is repossessed, is there a way to get it back (and will it cost you more)?

What’s the plan’s refund policy?

What happens if you’re still making payments on an item and then decide you don’t want it? Will they give you your money back? Will they charge you any fees?

What’s written in the contract?

For example, does the contract for a rent-to-own or lease-to-own plan explain who pays for repairs if the item breaks? Did a salesperson make promises? Are those promises written in the contract? Always get a copy of the contract and keep good records of the payments you make.

What are other people saying?

Find out about the reputation of the store or online shop and the plan, especially when it comes to returns and disputes. Search online for the store name, the name of the plan, and “complaint.” When it comes to disputes, know that these plans also typically offer fewer protections. Even if you use a credit card to make payments to the plan, those protections might not extend to the original purchase.

Getting Help if Things Go Wrong

Most states have specific laws that apply to rent-to-own, lease-to-own, and layaway plans. Some states also have consumer credit laws that apply to buy now, pay later plans. Check with your state attorney general or state and local consumer protection agencies for more information about your rights when you use these plans.

If you have a bad experience with a business when you’re using a buy now, pay later, rent-to-own, lease-to-own, or layaway plan, tell the FTC at ReportFraud.ftc.gov.

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