While buy now, pay later (BNPL) options seem appealing, research suggests they can lead to increased spending and financial strain. The convenience of spreading payments can mask the true cost, leading to overborrowing and difficulty managing finances.
If you're considering buying a new couch for $800, the option of spending $100 a month for 8 months with zero percent interest might seem appealing. However, research indicates that this approach can lead to challenging financial situations compared to paying for the couch upfront.You've likely encountered these options online. When making a purchase, instead of charging the entire amount to your credit card or debit account, you might see the option to buy now and pay later.
According to the Harvard Business Review, consumers who used buy now, pay later services were 9% more likely to make a purchase, and the number of items purchased increased by 10%. This trend was not just temporary; research examining the shopping habits of nearly 300,000 people showed that these increases continued for almost six months.'It's just the need.
BNPL Finance Spending Debt Budgeting
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