BOSTON — Buy now, pay later products may have gained traction with consumers, but credit card issuers are increasingly capturing demand for installment-based financing through their own card-linked payment options, according to new research from PYMNTS Intelligence.
Data from the forthcoming PYMNTS Intelligence Pay Later Ecosystem Report suggests that while buy now, pay later (BNPL) services helped popularize installment financing, credit card installment plans have maintained a significant usage advantage and are expanding more rapidly.
According to PYMNTS Intelligence, consumers used credit card installment plans at more than twice the rate of BNPL offerings across eight surveys conducted between April 2025 and March 2026. Use of credit card installment plans increased from 23% in April 2025 to 36% in March 2026, while BNPL usage began at 15% and remained relatively unchanged over the same period.
What Findings Indicate
PYMNTS said the findings indicate installment lending is increasingly being delivered through existing credit card relationships rather than through standalone BNPL providers.
The report also challenges the perception that BNPL products have a stronger appeal among younger consumers than traditional credit card-based installment options.
Among Gen Z consumers, 31% reported using credit card installment plans in April 2025, compared with 21% who used BNPL products, according to PYMNTS. By March 2026, usage of card-based installment plans among Gen Z consumers had climbed to 47%, while BNPL usage rose only slightly to 23%.
Millennials and bridge millennials showed similar patterns, with credit card installment plans consistently outpacing BNPL adoption, the report found.
Younger Consumers’ Behavior
PYMNTS said the data suggests younger consumers are embracing installment financing but are increasingly choosing options offered through existing credit card accounts rather than through dedicated BNPL providers.
The research also found that higher-income consumers are more likely to use BNPL products than lower-income consumers, contrary to the perception that the products primarily serve credit-constrained households.
Consumers with annual incomes of $150,000 or more used BNPL at roughly twice the rate of consumers earning less than $50,000, according to the report.
Higher-Income Consumer Datapoints
Among higher-income consumers:
- BNPL usage was 19% in April 2025, compared with 10% among lower-income consumers.
- By November 2025, usage rose to 22% among higher-income consumers while falling to 7% among lower-income consumers.
- In March 2026, BNPL usage stood at 20% among higher-income consumers and 10% among lower-income consumers.
PYMNTS said the income gap remained consistent throughout the survey period and suggests BNPL adoption has been strongest among consumers with greater financial resources rather than among those seeking financial inclusion alternatives.
Increasingly Embedded
The report concludes that installment financing is increasingly becoming a feature embedded within broader financial relationships rather than a standalone product category.
For banks, payment networks and financial technology companies, PYMNTS said the findings suggest that credit card issuers retain important advantages, including established customer relationships, account histories and consumer trust, that position them to drive future growth in installment financing.
The findings are based on monthly surveys of approximately 2,500 U.S. adult consumers conducted by PYMNTS Intelligence from September 2025 through March 2026, following the launch of its Pay Later research series in April 2025. PYMNTS said the survey sample was weighted to reflect the U.S. adult population by age, gender, education and income.
