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What is BNPL? Shoppers turning to buy now, pay later

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CHARLOTTE, N.C. (QUEEN CITY NEWS) – Inflation did not stop shoppers from snagging up deals this Black Friday.

Online spending over the weekend broke a new record this year, topping $9.2 billion in sales. Electronic toys and exercise equipment were the most popular purchases.

The shopping sprees didn’t slow down Monday.

Cyber Monday is looking to break another record; consumers are expected to spend about $11 billion.

“Less people to deal with, and I feel like they have better deals online,” South End shopper Tyler Carroll said.

Whether it is store credit cards or dipping into savings, more Americans are finding ways to check off their holiday shopping lists, even if it means going into debt.

“And that’s the last thing anyone needs right now,” LendingTree chief credit analyst Matthew Schulz said.

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With rising inflation, Schulz said shoppers are turning to buy now, pay later loans, also known as BNPL.

BNPL is a relatively new service that is similar to layaway. It allows shoppers to pay for their items over time instead of all at once.

“It’s actually been great. I’ve used it before on bigger ticket items or something like that if I want to space out the payments,” Michael, a Charlotte shopper, said.

“The truth is, the buy now, pay later if you use it wisely can be a really good way to get more for your holiday spending buck,” Schulz said.

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That is, until shoppers go overboard.

Because BNPL is relatively easy to get, has no interest, and is available almost everywhere – shoppers tend to spend more than they can afford.

“As long as you are making payments on time and as long as you are adhering to the schedule — they give you a certain schedule to pay the payments,” Michael said. “It goes really well.”

After taking off last year, BNPL lenders have been questioned for their lack of transparency and regulatory oversight.


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Earlier this year, North Carolina Attorney General Josh Stein joined a group of attorney generals urging the Consumer Financial Protection Bureau to investigate their sales tactics.

“For now, it’s such a relatively new phenomenon that a lot of powers at be are trying to figure out how best to handle it,” Schulz said.



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