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To buy now and pay later, you usually must pay a finance charge. This is because the supplier who waits for payment, or the lender who lent you the money to pay a supplier, could have invested the money instead and earned interest. Thus the finance charge you pay compensates them for that lost interest, as well as covering some of the costs and risk involved in extending you credit. The supplier may be the car dealer, appliance dealer, shoe store, or restaurant. The lender may be a bank, credit union, or finance company. Only you can decide whether it is worth the cost of the finance charge to have a car or other goods and services now, rather than later.
Many states regulate by law how much finance charge you can agree to pay and provide penalties if the supplier or lender charges too much. However, some states allow your agreement and competition among credit extenders to determine what you pay. You should shop for credit much as you shop for the best deal on a car or television set. The Truth in Lending Act and similar state laws allow you to do that.