Buy Now Pay Later Apps Surge in Popularity

Buy‌ Now, Pay Later: A Holiday Shopping Trend With Hidden Costs?

SALT⁤ LAKE⁢ CITY – This holiday season,‌ more Americans than ever are turning to “Buy Now, Pay later” (BNPL) services to spread the cost ‍of gifts and purchases. While ⁢these ‍programs offer the allure of instant gratification and avoiding credit card debt, experts⁤ warn​ consumers to be wary of potential ⁢pitfalls.

On Cyber Monday alone, shoppers spent‍ a record-breaking $1 billion using ⁢BNPL, according to ⁤recent reports. ⁣This surge in popularity reflects a broader trend: BNPL spending⁤ in the‌ US soared to over $75 billion in 2024, up from $65 billion in 2022.

Utah ⁣retailers are embracing this trend,offering payment plans through‍ popular apps like Affirm,Afterpay,Uplift,and PayPal.These platforms⁤ allow ‍shoppers to set up ​accounts and make payments ‍on their⁣ purchases over time.

“I think‍ it’s just the ⁢interest rates,” said Arthur Kelly, a salt Lake City shopper. “We grew up on the principal to stay away from debt. So that’s what we are trying to do.”

While BNPL services appeal to consumers across all income levels, financial experts urge caution.

“There’s always a temptation to spend now, and then to deal with the consequences ‌later,” said Benjamin⁣ Cummings, an ⁤Associate Professor of Financial Planning at Utah Valley University.”Do I⁢ see it growing? Probably. Is it a ⁢good idea? I’d be really ‍cautious.”

Cummings warns that hidden finance charges can quickly inflate the cost of purchases, making them more expensive‌ than initially anticipated.

“It seems like a good deal now, and you’re like ‘Hey, let’s get it now,’ because​ it’s a good deal,” he explained. ‍”Once you ‍add‍ on these finance charges, ⁤it may not be quite the good deal you were thinking it was.”

He​ emphasizes ‍the similarities between BNPL and credit cards, both involving agreements to pay for purchases later with potential interest charges.

“A credit card is something you can spend anywhere,” Cummings⁣ said.”You’re basically making​ an agreement with a ⁣financial institution to say ‘hey I’m going to charge this place interest to use the money now, and I’ll pay for it later.'”

Before opting for BNPL, Cummings recommends asking yourself⁢ crucial questions: “if you can’t afford it​ now, are things going ⁢to change in your future ⁣where you can afford it later?‍ Make sure you have a plan to pay it off as quickly as possible.”

Buy Now, pay Later: A holiday Shopping Trend With⁣ Hidden Costs?

SALT LAKE CITY – This holiday season, more americans than ever are turning to ⁢”Buy ​Now, Pay Later” (BNPL) ‌services to spread the cost of gifts and purchases. While these programs⁣ offer the allure of instant gratification and avoiding credit​ card⁣ debt, experts warn consumers to be wary of potential pitfalls.

On Cyber Monday alone, shoppers spent⁤ a record-breaking $1 billion using BNPL, according to recent reports.This surge in popularity reflects a broader trend: BNPL spending in the US soared to over $75 billion ⁣in 2024, up ⁢from $65 billion in 2022.

Utah retailers are embracing this trend, offering payment plans through popular apps like‌ Affirm, afterpay, Uplift,​ and PayPal. These platforms ⁢allow shoppers ⁤to set up accounts and‌ make payments on their purchases over ⁢time.

“I think it’s just the interest rates,” said Arthur Kelly, ​a Salt Lake City shopper. “We grew up on the principal to stay ⁢away from debt. So that’s what we are trying to do.”

While BNPL ⁤services appeal to consumers across all ​income levels, financial⁢ experts urge caution.

“There’s always a⁢ temptation to spend now,and then to deal with the consequences later,” said Benjamin Cummings,an Associate Professor of Financial Planning at Utah‌ Valley University. “Do I see it growing? Probably.‌ Is it a good idea? I’d be really cautious.”

Cummings warns that hidden finance charges can quickly inflate the cost of purchases, making them more expensive than initially anticipated.

“It seems like⁢ a good deal now, and you’re like ‘Hey,‍ let’s get⁢ it now,’ because it’s a good⁣ deal,” he explained. “Once you add on‌ these finance charges, it may not be quite the good⁢ deal you were thinking it was.”

He emphasizes the similarities ‌between BNPL and credit cards, both involving agreements to pay for purchases later with potential interest charges.

“A credit card is something you can spend anywhere,” Cummings said. “You’re basically making an agreement with a financial institution to say ‘hey I’m going to charge this place interest to use the money now, and I’ll pay for it later.'”

Before opting for BNPL,‌ Cummings recommends asking yourself crucial questions:​ “If you can’t ⁤afford ⁢it now, are things going to change in your future ‍where you can afford it later? Make sure you have a plan to pay ‌it off as quickly as ‌possible.”