U.S. shoppers are projected to spend a record $18.5 billion using buy now, pay later (BNPL) services during the holiday season, marking an 11.4% increase from last year. This surge in spending comes as many Americans are grappling with rising debt levels. BNPL services allow consumers to purchase items and pay for them in installments, typically over four payments, although some plans extend to 36 months. This method of payment is expected to outpace the overall holiday spending increase of 8.4%, which is estimated to reach $240.8 billion. However, the growing trend raises concerns about potential debt cycles, especially as nearly 10% of BNPL purchases are funded through credit cards. Consumer advocates warn that using credit cards for BNPL can lead to additional interest charges and complicate repayment. As the holiday shopping season approaches, categories like electronics and beauty products are expected to dominate BNPL purchases, reflecting a shift in consumer behavior.
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