The buy now pay later is a force and real in consumerism.
My humble opinion this growing trend is dangerous to all parties involved.
Americans will take on more debt and make prices of the product or service increase as the cost to pay the provider takes longer so they tack on the cost to the price of the product or service.
MarketWatch states:
Amazon AMZN, -0.82% Prime Day happens next week. Black Friday is coming in November and the holiday shopping season will be in full swing in December — and shoppers are already feeling the crunch.
“Buy now, pay later” spending rose 14.7% year-over-year to $46.7 billion between January 2023 and August 2023, according to data released Thursday by Adobe Digital Insights ADBE, -0.38%.
Buy now, pay later products allow consumers to split a big purchase into smaller chunks over a period of time. Most BNPL providers don’t charge interest, but some charge late-payment fees and other types of fees. Typically, BNPL payments span six weeks
BNPL spending is expected to reach an estimated $9.3 billion in November, which will make it the biggest BNPL monthly expenditure of the year, Adobe said. Cyber Monday is set to be the largest day for BNPL spending ($782 million, surpassing the previous year’s daily record of $658 million).
“It’s such an expensive time for so many people,” said Matt Schulz, chief credit analyst at LendingTree. “There’s an awful lot of people who are taking out these loans but not 100% sure they are able to pay back.”
Case in point: More Americans are using BNPL services to pay for groceries. Spending growth among BNPL users was driven by a 37.5% year-over-year increase in grocery spending, Adobe said.