Report: ‘Pay Later’ Holiday Spending Could Bring Financial Pain

While online holiday shopping data shows many consumers opting to pay for items in installments “later,” a Harvard financial expert told CNBC that delaying the purchases could end up hurting consumers in the long run.

“[‘Buy now, pay later’] means a Merry Christmas — but in the long run for many, [it] will hurt their credit,” Marshall Lux, a senior fellow at the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School told CNBC. “[It is] horrible, and a real statement on how stressed the economy is, especially for the average American.”

Mobile financial applications and web browser extensions like Klarna, Affirm, and Afterpay, give shoppers the ability to pay for items over time from four to several monthly payments, giving consumers a way to meet their holiday shopping goals without strapping them for cash, or running up credit cards.

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