More shoppers are turning to buy now, pay later (BNPL) plans this holiday season as they seek flexible payment options amidst inflation and rising credit card debt. Adobe Analytics predicts that BNPL spending will increase by 11.4% year-over-year, reaching an estimated $18.5 billion from November 1 to December 31, with nearly $1 billion expected on Cyber Monday alone. This payment method appeals particularly to younger consumers and those with low credit scores, as it typically involves soft credit checks and does not impact credit scores. However, consumer advocates warn about the potential pitfalls, such as accumulating interest and fees if BNPL payments are made with credit cards. The risk of overspending is also a concern, as consumers may feel they have more disposable income when they don't pay full price upfront. Retailers benefit from this trend, seeing increased cart sizes and conversion rates when BNPL options are available.
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