What is it about?

Consumers choose to pay now when they use debit cards and choose to pay later when they use credit cards. Paying now or later represents consumers' preference for payment-timing. Consumers prefer payment-timing that aligns with their financial well-being and purchasing goals.

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Why is it important?

Currently, consumers can only choose from prepaid, debit, and credit cards. They cannot choose any other duration for payment. Financial companies may build stronger relationships with their consumers if they could offer variable payment time versus the fixed time offers they have right now. For example, why should a consumer have to pay in 30 days after purchase when they use a credit card and not pay after 90 days or on a weekly basis? Perhaps, paying weekly may align with the financial cycle of the consumer, and therefore, they may feel more in control of their finances.


Payment companies offer prepaid, debit, and credit cards. Why can't they offer a variable time for making payment? How about allowing 90 days from purchase instead of the standard 30 days from the purchase? Or how about paying weekly? They advertise credit cards the most as they believe those cards make them the most money. I think that is a very restricted view of relating to consumers who may reluctantly use credit or debit cards compromising their satisfaction with the payment options. Perhaps an acknowledgment that offering consumers what is best for them can result in closer and more fruitful relationships that may help financial institutions see the value of this research.

Dr. Arvind Agrawal
The University of Nebraska Omaha

Read the Original

This page is a summary of: Why do many consumers prefer to pay now when they could pay later?, Journal of Consumer Affairs, December 2019, Wiley,
DOI: 10.1111/joca.12292.
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