Consumer Alert: Considering buying now and paying later to do your last minute shopping?  Read this first!

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ROCHESTER, N.Y. – You had the best of intentions.  This would be the year you got all your Christmas shopping done early. But instead you’re among the many scurrying to finish with Christmas two days away. This consumer alert is for you.  I’m examining the risks and benefits of those really popular buy now pay later loans.  Those loans are now being used online as well as in stores.

There are Buy Now Pay Later apps that allow you to pay on a product in installments.  Here are six apps that can be used in store at major retailers recommended by Nerdwallet.

  • Afterpay
  • Affirm
  • Klarna
  • Zip
  • Paypal Pay
  • Sezzle           

But before you use these products, you have to be aware of the downside of buy now pay later apps.  Click here for CNBC Select’s analysis of these apps.

  • It’s a loan that must be paid every two weeks.
  • Late penalties can be costly. For example, if auto payments are tied to your bank account and you have insufficient funds, you may be charged by both the bank and the loan company.
  • Interest rates can be very high, as much as 36 percent.
  • Taking out too many of these loans can get you in big financial trouble quickly.
  • Returns can be a huge hassle.  The buy now pay later company may require you to keep making payments even though you’ve returned the product until it gets the refund from the retailer.

Let’s take a look at the potential dangers of these loans. Let’s say you want to buy a gaming laptop for your kiddo for $649 at Walmart. Many buy now pay later loans come in four installments.  So you pay $162.25 up front and are expected to pay three more installments every two weeks.

But when the auto payment hits your account, there’s not enough money. The BNPL can hit your account several times.  Let’s say it tries three times over three days.  And let’s assume the loan company has a late fee of $10 and your bank charges you an insufficient funds fee of $30.

Multiply those fees by three and you’re now out 120 bucks plus that installment payment you still haven’t made.  And according to the Consumer Financial Protection Bureau, the buy now pay later business model is based largely on high fees and digitally tracking your buying behavior. They do that so they can encourage you to buy more stuff.