Buy Now Pay Later on Watches: Pros & Cons

Before going any further, this article should not be considered legitimate financial advice, and more of some guidelines to consider when contemplating financing your next watch purchase.

Watches in any capacity are a luxury in the modern era. With so many devices available that are capable of displaying the time, and often more accurate than any conventional wrist watch, watches are firmly in the category of an accessory and less than a necessary tool compared to decades prior. That being said, this hasn’t stopped watches from becoming increasingly popular, and having a watch that you are proud of on your wrist is a great way to showcase your tastes and personality, while also adding some practical functionality into the mix. 

Things to Consider When Buying a Watch

Watches, especially luxury watches, are also very expensive. Even select Swatches and G-Shocks can be multiple hundreds of dollars, going up to thousands of dollars for rare and collectable models. Well known luxury brands can reach as high as hundreds of thousands of dollars for certain models, ignoring special pieces that can go beyond seven figures. Regardless of budget, buying a nice watch is often a very considered and substantial purchase. When it comes to hobbies, a general guideline that I have heard is “never finance fun,” which means you should never borrow money, especially money you do not currently have that is truly disposable, to purchase a watch, or fund any hobby for that matter. As always, there are some exceptions that are worth considering.

With watches increasingly in the public eye, it has undoubtedly caught the attention of any industry that thinks that it can profit from it, including credit companies. Instead of directly getting involved with watches, many companies have decided it was worth financing the purchases of consumers, and often charging interest, ranging from very nominal fees to less than desirable rates. Often advertising manageable monthly payments over a period of time (ranging from a few months to a number of years), these advertisements make that dream watch you have been eyeing seem slightly more attainable. 

Before committing to a purchase utilizing financing for a watch, I would urge you to make certain that more than enough money is in your account to afford that watch. While you may consider making a few less shopping trips, and skipping a few nice meals out in order to make the purchase happen, you should never put yourself in an uncomfortable financial position to buy a watch. Everyone’s threshold of discomfort is different, so it is ultimately up to your discretion to decide what is best for you.

Financing Pros: The Right Situations

After deciding that you do indeed have enough money in your account, now you may consider financing options for a few reasons. Owing money is an obligation, but financing can be used as a smart financial tool in the right situations. Many stores, including Exquisite Timepieces offer free financing if payments are completed within a set time period. With high-yield savings accounts being more flexible and lucrative recently (as of February 2024), you could leave your money in your high-yield savings allowing it to acclimate interest, and then withdraw as needed to make the payments for watch before the one year (6 months for purchases between $300-$1000) no-fee time limit. That way your money is able to work for you longer while you are still able to enjoy the watch today. As long as the interest on the loan is lower than the yield on the high-yield savings (or high-interest savings of your choice), this is a great option.

Another scenario where borrowing is feasible is when you are certain of reliable income. In this hypothetical situation, let’s say you have saved half the amount needed to buy the watch of your dreams, but a great offer has come up that you are considering trying to make work. With financing available, you could pay half the amount now out of the savings (reducing the financed amount), and as long as you know you have reliable income coming that will allow you to live comfortably and afford the payments, the credit line allows you to close the deal without overextending yourself in the moment. This is more risky than having the money in your account, but should you have the risk tolerance for this, this is not the worst position to be in. Again, utilizing high-interest savings options can help your money work for you, helping offset some of the expense.

Financing Cons: Things to Avoid

A situation that should be avoided is completely funding a purchase with financing. Sure, the newest watch may have arrived at your favorite retailer, and a decent financing option is available, but if you do not have the funds to purchase the watch at all, let alone comfortably, you should politely tell the salesperson that the watch will be for another day. Some places do offer financing for large purchases, but make certain to read the complete terms of the offer. Many offer a grace period with zero fees and/or interest, but the grace period can be quite short and/or the resulting interest rate outside of the grace period may be atrociously unaffordable. There also may be fees for the service, or for late payments. “Buying” now and paying later can be really appealing, but if the complete deal is not right, it can be a very fast way to put yourself in an uncomfortable position if you are not careful. It will also likely sour your attitude towards the new watch you have just purchased.

Be Smart and Enjoy Your Watch

The key with any large purchase, especially one that is purely for fun, is to never over extend yourself financially. While low monthly payments may make it seem affordable, watches can be a very large purchase that should not be taken lightly. When used correctly, financing options can be a great way to facilitate a purchase of the watch of your dreams while keeping a secure financial footing. As long as you are able to afford the watch comfortably, financing can be used as a tool to allow your money to continue working for you, keep money liquid, and enjoy the timepiece of your dreams. You will enjoy it more knowing you made the purchase wisely.