Holiday Debt Soars as Buy Now, Pay Later Spikes 40%
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Usage of "buy now, pay later" (BNPL) services spiked 40% on Black Friday and Cyber Monday compared to last year, indicating consumers are battling growing debt obligations.
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Financial experts warn that while BNPL services appear to ease cash-flow with interest-free loans, consumers can easily overspend and face hidden risks.
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Nearly half of credit card holders carry a balance month-to-month, exacerbating debt troubles as balances and rates have never been higher.
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Any pandemic-era excess savings are depleted for most households, so rising holiday debt could catch up with consumers if the job market worsens.
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A Bankrate analyst worries this year's "holiday debt hangover" could be particularly nasty as indicators suggest many consumers are financially stretched thin.