How Credit Cards – And Rewards – Could Be Disrupted By “Buy Now, Pay Later” [Roundup]

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About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. The growth of BNPL is shocking and unsettling. Our last financial crisis was a result of people buying what they couldn’t afford. I’m not here to blame those people; the system took advantage of them. I wonder if the system is taking advantage of people again, this time in more subtle ways.

    Ultimately we all should strive to earn more, save more. Not buy what we can’t afford. Buy now pay later? I say buy later when you can pay in full. (exceptions for auto and home purchases obviously, and thank God the underwriting is more responsible now)

  2. @J.P.

    You’re right about underwriting being stricter for mortgages. Secured loans were the problem in 08 because of mbs being used for repo. Unsecured (which is what BNPL is) is not a major concern as it is not used as major collateral for funding. Circumstances are much different now than in 08. Any significant shock will mean more stimulus checks which kept the actual loan losses for credit cards very low in 2020-2021. BNPL would be in the same boat. Credit is the life blood of the economy and there is nothing wrong with the little guy being able to buy airfare, an IPad, or whatever on BNPL. PayPal has done it well in Australia and is expanding. Amazon now is doing it.


    BNPL isn’t a threat to CC dominance, however, it can eat some share over time. The greater fear for miles and points people is regulation that caps interchange fees like they do in Europe for non amex cards and what was done here for debit cards. The 100,000 point sign ups might be reduced in the future. Less people are carrying balances and less people are paying interest than they used to. Credit has expanded for a number of years but that’s because of higher limits and population growth. I don’t see 100K bonuses as sustainable if more people become financially literate. Sure, in emergencies and for certain expenses (Christmas presents for kids or car repairs) paying interest makes sense. All the big banks try to cross sell mortgages, personal loans (citi flex), deposit accounts, and investment accounts.

    Whatever the case, I earn what I can now. If miles and points diminishes in the future, so be it. Nothing lasts for ever. Maybe airlines can compete on price for business class instead of half the people being on awards, paid/mileage/status upgrades.

  3. I think the buy now and pay later isn’t a good idea considering its impact on the economy. I believe this will get people into trouble since individuals will tend to get what they cant afford. Despite the fact, it is a good idea but this will really bring people more harm than good.

  4. I tried this BNPL last year on my trip to New Orleans. Was there for 2.5 weeks and stayed in 6 Marriott properties. I used may Amex Marriott because of zero interest and payable in 12 months promo for any charge more than $100. I dont think it is a threat to CC and Rewards cause I still earned points for my stay..

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