Here’s why banks, credit card companies are wary of buy now, pay later loans

Now buy, then payment plans offer an attractive alternative to credit cards for consumers: they allow purchases to be divided into short -term, usually interest -free installments.

“The loan is not new. The loan has existed for thousands of years and the credit card is not new. However, they had difficulty in adapting to consumer needs.” He said. “I think what we see in the sector right now is the widespread adoption of alternatives to credit cards.”

86.5 million Americans estimated, according to the Emarketer, now pay loans in 2024, and this number may rise to 91.5 million in 2025. questionnaire He found that almost half of the Americans are now using a purchase and later paying service, including 11%, including 11% of the service using at least six times.

“He pushes the sections of the credit card industry,” TD Cowen senior analyst Moshe Orenbuch said. He said. “Buy now, then payment was created for people who did not want to use credit cards or were not too open. [credit] To buy credit cards. “

Lexisnexis Risk Solutions Kevin King, Vice President of Credit Risk Risk and Marketing Strategy, “Buy, Pay, the Pay then financed, Credit Risk Risk Risk and Marketing Strategy Vice President Kevin King, Credit Risk and Marketing Strategy Vice President Kevin King, a credit card or a Czech account is a purchase process. Reduces its use – these are large income drivers. “

Now, beyond direct difficulty, paying to credit cards, large banks and financial institutions later have other reasons for consumers using these plans, especially as the number of users continues to grow.

“Buy now, so far, the payment credit profile represents a giant black hole and consumer credit quality understanding.” He said.

Now follow the video above to find out what is behind the popularity of the purchase, and then traditional lenders such as loans and banks and credit card companies are against consumers using these programs.