Buy Now, Pay Later Holiday Spending Hits Record $16.6 Billion Amid Boom and Calls for More Regulation
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U.S. buy-now-pay-later (BNPL) purchases hit a new record of $16.6 billion over the 2022 holiday season and $75 billion for the full year. This represents a 14% annual increase.
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BNPL services allow consumers to split purchases into interest-free installments, appealing to younger and lower-income shoppers.
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Economists worry about a lack of transparency and regulation in the BNPL industry, dubbing it "phantom debt." Total BNPL loan volume jumped over 1,000% from 2019 to 2021.
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It's unclear if the BNPL boom shows economic strength or overspending and potential financial distress. Credit card debt also remains near record highs.
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BNPL data reporting is still limited, so the full extent of consumer BNPL debt and impact on credit scores is unknown. Credit agencies aim to improve BNPL data collection.