When it comes to using a buy now, pay later option, 60 percent of consumers said in a recent survey that they prefer doing so on an existing credit card versus a new line of credit.
The survey also showed “most consumers prefer making monthly over biweekly payments and prefer longer terms, especially for larger purchases,” Splitit said in a statement. “Additionally, 64 percent of consumers anticipate their credit card spending to be the same or more than they did in 2021.” The survey was conducted by Attest on behalf of Splitit and included more than 2,400 respondents.
“U.S. Consumer Perspectives: Credit Cards and Buy Now Pay Later” also revealed that 56 percent of those polled would prefer to make installment payments monthly instead of 25 percent of respondents wanting to pay every two weeks.
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The research also showed that the preference rate increases the larger the purchase amount, “with 70 percent preferring monthly payments on purchases of $500 or more,” Splitit said also noting that while 60 percent of those surveyed “are fine with four or fewer payments for purchases under $300, 66 percent favor more than four payments for a $500 purchase, and 75 percent want more than four on purchases of $1,000 or higher.”
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John Harper, interim chief executive officer of Splitit, said despite the discussions “around the decline in credit card use, we’re continuing to see continued growth on our platform, including many key categories around the home, fitness and sporting goods, jewelry and luxury.”
The report said as shoppers are planning ahead to make larger purchases and are considering using a BNPL or installment plan “on purchases over $1,000 in the year ahead, several categories stand out to make gains.” The survey found that 66 percent were eyeing home improvement and 63 percent were considering home goods purchases.
“Beyond the home, other top categories are health care expenses not covered by insurance (62 percent), automotive accessories and repair (61 percent), travel (56 percent) and jewelry (51 percent),” the company said.
Harper said from what the company is seeing so far in the past few months, “2022 will continue to be a year where people will be spending on the home and themselves. I also expect spending to shift eventually as more people are heading back to work as people upgrade their wardrobe and accessories.”
Splitit positions itself in the market as the “only credit-card-based installment payment solution,” which enables consumers “to spend smarter and better using the balance on their existing credit cards to pay for higher-ticket purchases over time without new financing, interest or fees.”