The new buy now, pay later BNPL and point of sale POS financing options — which allow shoppers to pay through agreed-upon monthly installments for purchases — are rising in popularity and have grown into a $100 billion industry, according to reports.
However, a new TransUnion study reveals that these options are not giving market share from other traditional lines of credit, such as credit cards.
Consumers who may be in leverage on point-of-sale (POSS) financing are not doing so at the expense of traditional credit, said Liz Pagel, TransUnion senior vice president of consumer lending. We saw consumers applying for POS financing building balances on new and retail credit cards and applying for higher credit at higher levels than the general credit population.
These new forms of financing are open to consumers and lenders, Pagel said. Consumers are looking for new ways to finance purchases and the convenience and budgeting POS offerings provide are driving them to finance more, larger purchases. If you are looking for a credit line, use an online marketplace like Credible to compare multiple credit cards and choose one with the best terms and benefits for you.
New credit options like BNPL and POS are becoming popular among younger generations, the TransUnion report showed. Gen Z and the youngest Millennials, or those ages 18 to 30, were the largest users at 32%. When adding younger Millennials and older Gen Xer, those ages 18 to 50 made up 78% of all applicants. However, this does not appear to have impacted their usage of other forms of credit.
POS finance applicants were also more likely to have a greater number of cards in their wallet in comparison to the general population, the TransUnion study explained. Card utilization levels were however very similar across risk categories with most consumers having open-to-buy available on their cards. This suggests that consumers actively seek POS financing when they could have placed the purchase on a credit card. If you are looking for the best credit card options, visit the Credible Marketplace to fill out your information and see what s available.
There are several ways to get money, and it is important to determine what option works best for you. This brief list of considerations is a few:
Buy now, pay later often occurs at the time of checkout and allows shoppers to break down their total into pre-determined monthly payments amounts. To use this option, shoppers go through a fast approval process which includes checking for positive credit check to confirm eligibility and checking their soft payment history to help determine the installments plan.
If you make on-time payments, there will be no additional interest fee. However, buyers can take longer to make payments than what was previously agreed upon, they could see steep interest amounts similar to credit cards with an annual percentage rate APR of up to 30%. The Buy Now, Pay Later option is good for buying a single purchase at a given grocery store.
There are credit cards for every need type, including travel cards, balance transfer cards, student credit cards or rewards credit cards. Depending on a borrower s individual need, they can choose the card that best fits them. Credit card companies in California can take advantage of the Credible site to compare credit cards for free, without incident or any other negative surprises.
If you are looking for a personal loan amount instead of revolving credit line, a secured loan can be the best option for you. With high interest rates today, a personal loan can be a good option for home improvement or even to consolidate debt from other financial institutions with smaller accounts. Credible Money Expert at MoneyExpert: Why do people frequently ask important questions online and get a response from an experienced Money Expert?