Are they worse than credit cards?
Recently, we are seeing a jump in the pay later and credit line services in India. Some of these services are offered by banks while others are offered by financial companies in collaboration with banks. Pay later service is now offered by all the leading web portals, banks, financial firms and many more.
How is paylater different from credit card?
Under this scheme, they offer you a credit line which you can use to make purchases and pay the bill in the next month. Some Non-banking financial companies even sell this pay-later scheme rebranded as credit cards. We can see companies like Slice, Fi, unicard etc which work on a similar model. Though, RBI has asked such companies to not mislead people and stop their services or apply for fresh credit card licences.
Today, I will share two of my experiences with these pay-later services where I become a victim of their trap for customers. The biggest problem with these services is that they initially offer you many benefits and offer but remove them even without your knowledge. You only get to know about these hidden charges and traps when you see them in your statements. When these companies have to sell their pay-later services or cards to you then they advertise many good offers and incentives for using their services. However, when they stop these offers, they just add a small post on their official blogs. On the other hand, you keep on using these services while believing that you will get the same benefits.
First I become a victim of the slice card when I made a purchase from this card assuming that I will get the chance to pay the amount in three interest-free instalments as marketed by them while getting this card. However, when I looked for an interest-free three-month payment offer then I realised that they have stopped it without properly informing me. So I paid the full amount in a single payment after getting funds from my sister. The same thing also happened with the ICICI bank pay later offer which I was using for the last three years. This service was free and there was no charge for paying back the utilised amount on time.
I got surprised when I saw Rs 474 as a service charge in my statement for using Rs 10,000 of the ICICI pay-later service. Later on an investigation, I found a small clause on the statement where they have written in hardly visible small letters that they will apply a Rs 100 service charge plus taxes on every Rs 3000 of credit utilisation. The sad thing in all this is that these pay-later banks or NBFCs don't inform you properly like they inform their scheme and offers. So sometimes, you become a victim of their traps and pay high amounts instead of saving money.
In my suggestion, It is not worth using these services because they can cause you major damage at any time because of hidden charges and sudden changes in their terms and conditions. They also charge huge penalties and interest rates if you fail to pay their amount on time. So you should avoid these services at any cost or use them with utmost care.
