Many shoppers are using 'buy now, pay later' plans to finance their holiday shopping, but there could be some risks and downsides to doing that.
"Buy now, pay later" plans are surging in popularity this holiday season, with cash-strapped consumers no longer receiving stimulus checks and expanded child tax credits to help with the bills.Paige Allen is among those trying to finish up their holiday shopping right now. But with money tighter than it's been the past two years, she's using"buy now, pay later" to help fill her family's stockings.
"It helps around Christmas time," she said,"because it gives you time to figure out what you want to buy and pay for it after the holidays." Adobe Analytics, which tracks online shopping data, found more shoppers are turning to"buy now, pay later" programs this holiday season than ever before. The week of Cyber Monday, for example,"buy now pay later" orders were up 85 percent compared to the previous week, it found.
While these plans provide a lot of flexibility, financial experts are concerned that some shoppers might go overboard. Sarah Foster of Bankrate.com said younger adults, Gen-Z-er, and millennials are more likely to feel pressured into spending more money than they're comfortable with.And younger people are not only using it for gifts, Foster said, but to cover travel costs.This is making many travelers put that airline ticket on a pay-later plan."Buy now pay later" programs separate big-ticket items into smaller installments, often interest-free.
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