Consumers don’t always realize buy now, pay later (BNPL), a new spin on the concept of layaway, is a form of credit or a loan, as they continue their holiday shopping. BNPL companies had a major jump in online sales during the week of Black Friday (Nov. 21 to Nov. 27) up 68% compared to the previous week, according to the latest Adobe Analytics. CNBC’s Small Business Survey reported higher BNPL popularity among Black and Hispanic Americans with 12% of Blacks and 13% of Hispanic Americans saying they use BNPL for holiday purchases, compared to only 5% of white Americans.
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The BNPL market expected to reach $3.98 trillion by 2030, according to Allied Research. CultureBanx noted that here-in lies the issue, because many consumers don’t fully understand this new form of debt financing, it’s easy to get caught up in a bad financial situation. Currently, 27% of Black households are late on paying their debts. Lending Club’s Holiday Season report found that 37% of Americans plan to use financing such as personal loans, credit cards and buy now, pay later this holiday season, up from 34% in 2021.Forbes