Jon Quast

But not everyone is in that situation.

86% of users for Buy Now, Pay Later, according to one Morgan Stanley report,

Their motivation to switching to that over credit card was the 0% APR.

You have four interest-free payments, you can extend it out over the entire year rather than just the month.

That's one incentive.

Now, I think we've all heard the stories of how you can use buy now, pay later for your Chipotle.

I think that we would agree that

probably breaking your lunch down into four payments over the course of a year, maybe not necessarily the best thing.

But here's what's interesting here.

This is some data from Klarna that they're sharing.

When it comes to canceling your credit card, switching to buy now, pay later,

People who earn $100,000 or more annually, they're the ones who are making the switch more than anyone else.

This is actually a higher-end consumer thing that is happening, not so much at the lower tiers financing a burrito.

These are people who are making good money, and they're switching, and one of the big motivations is a 0% APR.

You look at what Klarna just launched as far as its subscription services.

Yeah, they're not necessarily cheap.

$20 a month for premium, $45 a month for the max.

But comparably, we're looking in the same ballpark as these higher-end credit cards.

And so, maybe they're looking at the data saying, we see who is making the switch to our platform, and we're going to offer them a higher incentive for this kind of a tier of consumer.

And so, very interesting move by Klarna.