People Are Ditching Credit Cards For Buy Now, Pay Later

...plus other credit card news you may have missed this week

Weekly Credit Card News Lowdown

The Balance

The financial product information on this page is accurate as of the time of posting; some of the offers mentioned may have expired since that time.

Many consumers are swiping right on buy now, pay later (BNPL) purchases, and a new survey found these glowing new relationships are pushing credit cards to the back of people’s wallets. The credit card industry also brought us news of sweeter bonus categories for the Capital One Savor cards and another way to use new Amex cards online right away.

This credit card news roundup contains what you should know about the cards in your wallet. You’ll also learn about new product releases, offers, and reports that will keep you abreast of all things credit-related while your head is spinning from the nonstop cryptocurrency news rollercoaster.

What’s the Lowdown?

Here’s what has caught our attention since May 13, 2021.

People Are Ditching Credit Cards For Buy Now, Pay Later

Buy now, pay later services such as Affirm and Afterpay have been a trendy payment option for a while. A new consumer survey from C+R Research shed some light on just how popular they really are, especially among credit card users. 

More than half (56%) of BNPL users said they already prefer the services over their credit cards, and 38% said that the installment payment options will eventually replace their credit cards altogether. Survey respondents said they prefer BNPL options to credit cards because of the flexibility, low or no interest costs, and easy approval processes. 

The online survey of 2,005 consumers was conducted to gauge the popularity of BNPL now and during the pandemic. The survey also looked at how often consumers use a point-of-sale installment loan to make a purchase, which service they prefer, and the average dollar value of BNPL purchases. Overall, 60% of respondents said they have used a BNPL service and almost half (46%) are currently making BNPL payments.

While BNPL is popular, it may also be encouraging overspending. The survey found more than half (57%) of BNPL users have regretted making a purchase because it was too expensive. Similarly, many said they have fallen behind on making a payment (56%)—or believe they’ll find themselves in that situation sometime within the next year (46%). 

Using a BNPL service to finance online purchases may seem easy breezy, but it’s not risk-free. Before you buy, consider how a BNPL application may impact your credit, especially if you fall behind on payments. If you’re already in over your head, close those internet shopping browser tabs and make a debt repayment plan

Capital One Refreshes Savor Cards Bonus Cash-Back Category Menu

The rewards menu of Capital One’s Savor cards became more appetizing this week, thanks to the addition of a new (and permanent) bonus category and boosted cash-back rates for groceries. 

Consumers who open or already have the Savor or SavorOne Cash Rewards card will now earn 3% back on grocery purchases (both cards offered 2% back before). These cardholders will also earn extra rewards on streaming service purchases. The Savor card gives cardholders 4% back on purchases with popular services such as Hulu and Netflix, and the SavorOne card offers 3% back. Those updates are on top of what each card already offers for dining and entertainment purchases.

The new cash-back earning rates make these more competitive grocery rewards cards, especially the no-annual-fee SavorOne card. Specific streaming service bonus categories are also rare and only offered by a handful of cards, such as the Discover it Cash Back card and the now-retired Wells Fargo Propel American Express Card

New Amex Cardholders Can Now Use Instant Card Numbers Via PayPal

Eager online shoppers now have another way to quickly use their new American Express card—PayPal. Once approved for a new U.S. consumer Amex card online or over the phone, eligible cardholders can add that new card to their PayPal account, according to a Monday announcement emailed to The Balance. You can use the new card for online purchases with PayPal before the physical card arrives in your mailbox. 

This is an update to the Instant Card Number feature Amex already offers, which lets new cardholders add their actual card number—not a temporary one—to their Apple Pay, Google Pay, Samsung Pay, or Fitbit Pay mobile wallet. It's handy if you want to start making purchases and earning rewards right away, and avoid the annoyance of updating saved card numbers later when the physical card arrives.

Amex told The Balance the Instant Card Number service and this new PayPal option is available for all consumer cards, even those branded by an airline or hotel loyalty program.