By Sage McHugh on September 1, 2012 in
A new payment option has been gaining some eyeballs at online checkouts. It's called Bill Me Later and this deferred payment option may not be all it is cracked up to be.
While the service might just be gaining momentum, the company has been around since 2000 and acquired by EBay in 2008 as a PayPal company.
How does it work?
Bill Me Later is a deferred payment system that allows shoppers to make purchases online and over the phone. You can pay in full within three months after the initial transaction without incurring any interest fees. Although Bill Me Later offers a longer grace period, it still works like a credit card. If you don't pay in full within 90 days, you'll be charged 19.9% interest on the amount you owe. A penalty also applies if you don't pay your bill on time: You could be charged a late fee of up to $35. Users are given a credit line, which is determined by the amount of their first purchase. Your buying power may then fluctuate based on your outstanding balance, but Bill Me Later says your credit line will never fall below $500.
Bill Me Later is accepted at over 1,000 online retailers. Go here to see a full list of stores where Bill Me Later is available. Once you sign up, you can receive special offers like discounts and free shipping.
How do you apply?
There are two ways to apply for a Bill Me Later account:
- Visit any retailer that accepts Bill Me Later as payment, select your merchandise and choose the Bill Me Later option at checkout. You will be given instructions to guide you through the application process.
- You can apply directly through Bill Me Later's website by filling out this online application.
All applicants are also required to provide their birth date and the last four digits of their Social Security number. They are also subject a credit check and credit approval. If approved, users can begin making purchases immediately.
Consider your credit score
An article from Wall Street Journal's Wallet.com warns that Bill Me Later could potentially damage your credit score. Consumers might be confused if they don't read the fine print under the terms of use. When you apply for a Bill Me Later account, they will perform a hard inquiry on your credit. A hard inquiry will lower your credit score and remain on your credit report for 24 months. However, a hard inquiry will not impact your credit score after 12 months. If you're approved, Bill Me later will register as a new account on your credit report.
Heed the user reviews
Although Bill Me Later's business model sounds straightforward and convenient, user reviews expose a harsh reality. We found a deluge of bad reviews on several consumer complaint boards, including a 14-page thread on PayPal's community forum. Many users say that it's almost impossible to cancel the service, and others claim they were signed up for an account without their knowledge.
There are over 100 reviews -- most of them scathing -- on ConsumerAffairs.com, where Bill Me Later earns a extremely low overall satisfaction score of less than 1.5 stars (out of 5). The majority of users say that Bill Me Later fails to provide billing statements by mail or email, leaving customers unaware of payment deadlines. Others claim they were charged late fees even though they submitted their payments on time. When users attempted to rectify the billing errors, many say their accounts were locked without an explanation. Similar complaints are detailed on PissedConsumer.com and Ripoffreport.com.
The cancellation policy is not listed on Bill Me Later's website. When we called the company to see if they could clarify their cancellation procedure, a representative informed us that a verbal notification is required over the phone in order to cancel an account.
The bottom line
We can't ignore the sheer number of negative user reviews. For too many, it seems Bill Me Later is more of a scam than a legitimate payment plan.
Have you used Bill Me Later to make purchases? Please share your experience and help fellow consumers make an informed decision.
