NEW YORK — Buy now, pay later loans are no longer just a way for younger shoppers to cover splurges, according to new research showing even consumers with credit cards and other payment options increasingly turning to installment plans.
A survey from YouGov found 82% of U.S. adults who report being satisfied with their credit cards also use buy now, pay later, or BNPL, services. Overall use has surged from just 4% of Americans in 2021 to 26% this year, the firm reported.
“While BNPL is often seen as an option for people looking beyond credit cards, the data shows something different,” YouGov said.
Other surveys suggest the market may be larger. PartnerCentric, a marketing firm, recently found 52% of U.S. adults use BNPL, while credit bureau TransUnion estimates about 130 million Americans — nearly half of all adults — have taken out a BNPL loan in the past year, according to Money.com.
Gaining Traction
The short-term financing plans, which let shoppers split payments over several weeks with little or no interest, began gaining traction around 2012 with online retailers. They have since expanded broadly, with companies such as Klarna and PayPal now offering debit and credit cards that enable BNPL purchases anywhere Visa or Mastercard is accepted.
Convenience and flexibility are now the main draws, YouGov said. The top reasons cited for using BNPL were the ability to spread payments over time and ease of use.
Some ‘Alarms’
But the trend is also raising alarms. The Federal Reserve reported that 24% of BNPL users made at least one late payment in 2024, up from 18% a year earlier.
“It’s creating a cycle of dependency,” accountant Alaina Fingal, who runs The Organized Money, told Money.com. “Once consumers start using BNPL for essentials like groceries or gas, it can lead to a reliance on loans to meet short-term everyday needs.”
