Inflation causes large increase in ‘buy now, pay later’ plans

Buy Now, Pay Later
Buy Now, Pay Later
Published: Nov. 29, 2022 at 3:57 PM CST
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BISMARCK, N.D. (KFYR) - As prices of everyday necessities continue to be on the rise, price tags on this year’s Black Friday sales went higher as well.

Inflation has had an obvious effect on Black Friday shopping. Prices are continuously rising, consumers are feeling the financial strain, and all that negative economic news resulted in a dramatic rise in “buy now pay later” plans, which went up a whopping 78%.

“Especially with this time of year, people want to go out and buy gifts and things like that. They’re putting that on a ‘buy now, pay later,’ because things are a little tight right now with having to spend more on the basics,” said David Wald, managing financial advisor with Securian Financial Advisors of ND.

Tight budgets and financial strain did not seem to deter buyers from shopping on Black Friday or Cyber Monday. Instead, they just found another way to spend — with “buy now, pay later” financing. Although these purchase agreements aren’t all bad, according to Wald, making sure to pay purchases off before the final day is crucial, as full interest will be charged if there is an unpaid balance.

Financial advisors say the sting of inflation can be worrisome, but maintaining a healthy budget will keep households from negatively impacting debt.