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WHEN planning a holiday trip, many airlines and online ticket booking services offer “fly now, pay later” or paylater packages.
Quoted from Gulf News, recently, Dubai-based travel agent and travel consultant Richa Dev said paylater schemes are not always cost-effective and risk-free. Paylater services help the travel budget become more flexible so that one can get extra time to accumulate the savings needed for the trip.
“With the ‘fly now, pay later’ financing scheme, you are given the option to pay for travel-related booking reservations without incurring any costs. If paid within the specified time period, most of these loans are interest-free. However, if you miss a payment, you will be charged interest,” said Richa Dev.
Dev explained that the main advantage for impromptu travelers using a “fly now, pay later” (FNPL) payment scheme is that once the booking is complete, one can start the trip without paying anything to the travel agent. The payment cycle starts only after he completes the trip.
Meanwhile, travel planning manager at Dubai-based European tour operator Sophia Sanchez said that in such financing schemes, disbursement of funds is broken down into small amounts and divided into a series of payments, thereby providing flexibility to buyers who have limited funds. One has to make the first payment when booking a ticket or checking out a hotel while traveling.
Sanchez and Dev also caution travelers not to consider “FNPL” plans as a means of risk-free or cost-free travel and advise having reserve funds so that fias can easily repay the loan on time without incurring any penalties or interest.
“Fly now, pay later” schemes can lead to confusing terms, challenges in filing and resolving disputes, and stringent requirements. Seeing as how it can encourage consumers to take on more debt than they can afford, paylater schemes can sometimes do more harm than good.
“In addition, some FNPL loans require ‘autopay,’ which can be problematic for people who have insufficient funds in their connected payment account. They may incur late fees from the FNPL issuer, as well as administration fees from their bank,” Dev said.
If repaid on time, interest-free FNPL purchases provide an affordable alternative to credit cards, which typically charge interest on the outstanding balance. Given clear payment dates and fixed amounts, the service can help with budgeting.
Other risks to consider with paylaters include rising interest rates, non-refundable deposits, and hidden fees for changing plans.
“So, if travelers decide not to travel or change their plans, they will not get their deposit back. Additionally, they may incur additional fees or penalties for cancellations or changes. So, keep this in mind when using easy payment options,” concluded Dev. [antaranews/photo special]
