Financial Face-Off: Buy now, pay later vs. credit cards — which one is better for you?

by | Dec 19, 2022 | Stock Market

Hello and welcome to Financial Face-off, a MarketWatch column where we help you weigh financial decisions. Our columnist will give her verdict. Tell us whether you think she’s right in the comments. And please share your suggestions for future Financial Face-off columns by emailing our columnist at lalbrecht@marketwatch.com. The face-off Holiday shopping season is in full swing. Despite economic headwinds, there’s some evidence that consumers aren’t planning to curtail their spending on gifts and celebrations. While 37% of U.S. households say “their financial situation is worse than last year,” overall holiday spending is “expected to match 2021 levels, at $1,455 per consumer,” according to Deloitte’s 2022 holiday retail survey. 

As you head out to stores or hunt for the perfect stocking stuffer online, what’s the best way to pay for those purchases? Should you use buy now, pay later (BNPL) or a credit card?Why it matters Buy now, pay later, where a purchase is typically divided into four payments paid over several weeks, has exploded in popularity. You’ve probably seen offers to use BNPL pop up during checkout when shopping online. Signing up is quick and easy. But some consumer watchdogs say it’s a little too easy to get a BNPL loan. BNPL isn’t as closely regulated as credit cards are. The Consumer Financial Protection Bureau and Consumer Reports have both identified some problems with BNPL and called for more consumer protections.  While most shoppers were satisfied with their BNPL experience, about one-third said they ran into pro …

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