‘Buy Now, Pay Later' Catches on Just in Time for Holidays

As Americans shop for the holidays, they will likely see a swarm of offers to get their gifts now but pay for them later in fixed monthly installments.

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Fueled by several hot Silicon Valley startups as well as a push by the big credit card companies, “buy now, pay later” is now available for purchasing a $1,500 Peloton exercise bicycle as well as a $60 floral bouquet. Thousands of retailers, big and small, often have an option on their websites to pay for a purchase in installments at checkout. In the case of credit cards, customers are being allowed to create fixed payment plans days or even a few weeks after the purchase.

Americans seem to be champing at the bit to try this financial option, which has been common outside the U.S. for some time. One major credit card company says roughly six out of every 10 of its U.S. customers started a buy now, pay later program for the first time this year, and the Silicon Valley-backed companies who offer these plans are seeing tens of thousands of new customers every week.

“My shopping habits can be a bit impulsive, so I like the ability to break it up over several payments,” said Shahin Rafikian, 26, who lives in Los Angeles and has used several buy now, pay later services to purchase concert tickets, vinyl records and other items.

Rafiki and said he would have likely purchased fewer large-ticket items if the cost had just gone onto a credit card that never got paid off.