I just ran across an interesting blurb by Asa Fitch in the July issue of Money Magazine about a service called “Bill Me Later.” Apparently an increasing number of e-commerce sites, including WalMart.com, Apple.com, Hotels.com and over 400 others, have begun offering this as an alternative payment option for people that are concerned about online security. Rather than submitting your credit card number, you’ll instead receive a hard copy invoice and you then write a check and mail it in.
Sounds pretty harmless, doesn’t it? Well… The first time you select “Bill Me Later” you’ll be asked for you date of birth and your social security number. Guess what? You’ve just applied for a revolving credit line which comes complete with a 19.99% APR and late fees of up to $39. To be fair, there’s really no other way to set something like this up — if they’re going to send out the product without having received payment in advance, then they’d be fools not to secure it with a credit line.
So how necessary is a service of this sort? Not very… As it turns out, less than 1% of all cases identity theft begin with an online transaction. In fact, far more ID thefts start with stolen mail, so you’re really not protecting yourself if you select “Bill Me Later.” And if you can’t afford to pay for whatever your buying, then you should probably wait until you have the cash on hand before buying instead of relying on “Bill Me Later” as a credit line.