Installment Payment Plans Are Booming This Holiday
December 14, 2020
Consumer sentiment surveys have shown that Americans are concerned about the current state of the economy, but optimistic about the post-pandemic future. This perhaps explains the recent popularity of “buy now, pay later” installment purchasing plans.
A recent survey from data tracking firm Cardify found that almost half, 44%, of consumers said such plans are an important part of determining how much they will spend this holiday. The plans, offered by merchants in partnership with startups, allow shoppers to break their purchase into several payments, usually without interest or fees. Payment services like PayPal and some credit card companies have rolled out similar plans.
One potential downside is that if a payment is missed, there can be substantial fees and penalties. The programs also sometimes encourage consumers to overspend. The Cardify survey also found that 48% of consumers said that “buy now, pay later” plans allow them to spend 10% to 20% more than they would using a credit card