The problems with using buy now, pay later to fund travel
“Buy now, pay later” services like Affirm, Afterpay and Klarna can sometimes provide a cheaper, more accessible version of credit
Book a flight or hotel room now, and pay it off later? It’s an increasingly common trend in travel spending. Companies like American Airlines , United Airlines and vacation rental website Vacasa now offer the option to make reservations now and pay it back incrementally over time with “buy now, pay later” services.
Between 2020 and 2021, travel and entertainment purchases were the fastest-growing segment of the buy now, pay later phenomenon, according to a September 2022 report from the Consumer Financial Protection Bureau.
Buy now, pay later is an alternative type of short-term credit for online purchases offered by companies including Affirm, Afterpay and Klarna . The shopper immediately gets their purchase and pays it back later, typically in four installments or monthly payments.
While buy now, pay later has been popular for years in segments such as apparel and beauty, it’s slowly growing in other areas, including insurance, education and groceries — and travel is outpacing them all.
