“How Buy Now, Pay Later is Shaping Holiday Spending in 2023”

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Buy Now, Pay Later: A Growing Trend in Holiday Shopping

Experian recently conducted a survey of 1,012 consumers to understand the growing trend of Buy Now, Pay Later (BNPL) plans. The survey, carried out on November 28, 2023, revealed some interesting insights into how consumers are planning their holiday spending.

Buy Now, Pay Later Is Part of 1 in 5 Consumers’ Holiday Plans

BNPL plans are becoming an integral part of holiday shopping for many consumers. While credit cards remain popular, with about 137 million people making at least one credit card purchase on Black Friday since 2020, BNPL plans are gaining traction. On Cyber Monday alone, nearly a billion dollars were spent using BNPL plans, marking a 42.5% increase over 2022, according to Adobe Analytics.

Experian’s survey found that 20% of consumers plan to use BNPL plans for their holiday shopping this season. This trend is particularly strong among younger consumers, with nearly half of those aged 25 to 34 planning to use BNPL for some of their holiday purchases. However, the adoption rate declines with age, with only 10% of those aged 65 or older expecting to use BNPL.

Household Income Not a Factor for Buy Now, Pay Later Usage

Contrary to what some might think, household income does not significantly influence the use of BNPL plans. Experian’s data shows that higher-income individuals are just as likely to use BNPL plans as those with lower incomes. One major reason for this could be the interest-free payments offered by BNPL plans, which are attractive compared to the average 23% APR on credit card balances.

A Convenient Budgeting Tool That Avoids Interest

For many consumers, BNPL plans offer a convenient way to manage spending without incurring interest. According to the survey, 34% of consumers cited controlling their spending as the main reason for using BNPL, while 31% mentioned convenience. Additionally, nearly a quarter of consumers use BNPL to avoid interest payments, making it a popular choice for holiday shopping.

The Bottom Line

As BNPL plans become more widespread, they are likely to become a staple in both online and in-person shopping, not just during the holiday season but throughout the year. With their growing popularity, especially among younger consumers, BNPL plans could significantly impact how we spend and save in the future.

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