Published by maria gbaf
Posted on September 24, 2021
2 min readLast updated: February 2, 2026
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TransUnion's study reveals that 'buy now, pay later' plans are not significantly reducing credit card debt, with 54% of applicants reducing their card debt compared to 60% of the general population.
By David Henry
(Reuters) – Borrowers who apply for “buy now, pay later” or other point-of-sale financing tend not to pay down their credit card debts as much as the general population, credit reporting company TransUnion said on Thursday.
The conclusion, from a new study, indicates that credit card lenders might not have lost as much business as suspected during the pandemic to the rise of “buy now, pay later” plans.
“These new forms of financing are growing the credit pie, opening up more opportunities for both consumers and lenders,” said Liz Pagel, senior vice president of consumer lending at TransUnion.
The study looked at credit profiles of more than 4.5 million people who applied for point-of-sale financing from October 2019 through March.
TransUnion found that a smaller portion of people who applied had reduced their card debt, 54%, compared with 60% of the general population. Some 20% increased their card debt by more than half.
Though financial technology companies have lured shoppers https://www.reuters.com/article/us-usa-consumers-pay-later-idUSKBN2A8036 with the additional ways to borrow, big banks have continued to predict that card lending revenue will increase as card balances rebound from being paid down during coronavirus lockdowns.
The study did not determine how much additional card lending banks lost to “buy now, pay later.”
In a separate TransUnion survey in August, one-third of people who had used a “buy now, pay later” plan said they would have used a credit card had the plan not been available.
Those applying do not appear to be increasing the risk of losses on existing loans, TransUnion said. Delinquency rates on their credit cards six months after their applications were only slightly worse than the general population at 3.2% versus 2.7%.
“It does not look like, at this point, consumers are over leveraging themselves,” Pagel said.
(Reporting by David Henry in New York; Editing by Mark Potter)
The article discusses the impact of 'buy now, pay later' plans on credit card loans, based on a TransUnion study.
No, the study shows that these plans are not significantly reducing credit card debt.
Delinquency rates are slightly higher for users of these plans but not significantly alarming.
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