Expedia Pay now vs. Pay later.
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When booking a hotel it depends on whether you book in the currency your card is issued in. If you're booking in the same currency as paying (i.e. you booking in USD and your credit card/bank account is in USD), there is no difference. But if it is different - if you're booking in USD, but your card.bank account is in Euro - by "pay now" you are using the today's exchange rate which is known. If you pay later, you'll use the exchange rate at the day of payment, which may be better or worse than now.
The cancellation and other terms are usually the same, although some booking systems (like Orbitz) give you "orbucks" (i.e. their points) if you use Pay Now.
Of course if you use "Pay now" you are charged in full immediately, and if your booking is way in advance, you lend Expedia money in interest-free. With "Pay later" you will have pre-authorization only (or nothing at all until X days before your checkin).
Note that this is very different with car rentals - in most cases where I see "Pay now" being offered for car rental, it makes the reservation non-refundable, and in some cases non-changeable, while "Pay later" is "normal" car rental where you're not even asked for a credit card.
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Source: stackoverflow.com
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