Rate cuts and a Santa Rally coming !NEW YORK, Sept 25 (Reuters)...

Rate cuts and a Santa Rally coming !

NEW YORK, Sept 25 (Reuters) - U.S. shoppers are expected to spend a record $18.5 billion using third-party buy now, pay later (BNPL) services for holiday purchases in the last quarter of the year, according to projections by data firm Adobe Analytics released on Wednesday.

With many Americans recently carrying more debt, spending on buy now, pay later services is set to increase by 11.4% over the holiday season a year ago, Adobe said.

BNPL services let shoppers expand their purchasing power by paying for merchandise in monthly installments spread out over as many as 36 months; however, the most common payments are four-installment plans.

The expected jump in spending using BNPL exceeds the projected 8.4% increase in overall spending in the upcoming holiday shopping period, which could reach about $240.8 billion, according to Adobe Analytics. Its forecast applies to the period between Nov. 1 and Dec. 31.

Nearly 10% of BNPL purchases are made using credit cards, automated clearing house transactions and other forms of payment outside of debit cards, according to the Financial Technology Association, which has Zip and Klarna as members. The FTA said that its members report less than 2% delinquency rates for BNPL purchases.
U.S. lenders' net charge-off rates for credit cards, or the amount banks did not expect to collect on the loans, rose to 4.82% in the second quarter, according to data from the Federal Deposit Insurance Corporation. That was the highest since 2011.