Even People With Credit Cards Are Flocking to Buy Now, Pay Later

Buy now, pay later loans aren’t just for Gen Zers with a tendency to splurge while online shopping. Even people who already have access to credit and other payment methods are flocking to use the installment plans.

Once a niche payment option often used by younger Americans without the means to make big purchases outright, BNPL plans are now going mainstream. According to a new survey from the research firm YouGov, 82% of U.S. adults who say they are satisfied with their credit cards are now using BNPL.

“While BNPL is often seen as an option for people looking beyond credit cards, the data shows something different,” the report states.

Usage of BNPL has been surging across the board. In 2021, YouGov data showed that 4% of Americans said they use BNPL options. That share has now jumped to 26%.

YouGov's BNPL report — published in August — was based on survey responses from a representative sample of U.S. adults, approximately 1,000 of which were credit cardholders and 2,000 were BNPL users.

Separate estimates suggest BNPL's popularity could be broader. Some 52% of U.S. adults said they use BNPL in a recent poll by marketing firm PartnerCentric. And the credit bureau TransUnion recently determined about 130 million U.S. consumers (equating to about half of all U.S. adults) have taken out a BNPL loan in the past year.

Why is BNPL getting so popular?

BNPL crashed onto the shopping scene circa 2012 as an alternative to credit that allowed shoppers to split their payments up over time, usually several weeks, with little-to-no interest. Initially, the option was limited to a handful of online retailers that offered BNPL at checkout.

Since then, BNPL companies have made major pushes to expand beyond online retail. You can now use BNPL to purchase items ranging from a burrito at Chipotle to tickets to Coachella.

In June, BNPL provider Klarna released a physical Visa debit card that allows customers to choose to BNPL anywhere Visa cards are accepted. Around the same time, PayPal also rolled out a physical Mastercard that has similar BNPL features at checkout.

At first, a large draw to BNPL products was that they required little to no credit history, making them especially attractive to younger shoppers. Now, as the availability of services rapidly expands, convenience is the name of the game. According to YouGov, the top two reasons people use BNPL are for the ability to spread payments over time and ease of use.

However, some experts worry that this convenience leads people into more debt.

"It's creating a cycle of dependency," Alaina Fingal, an accountant and owner of The Organized Money, recently told Money. "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."

According to the Federal Reserve, Americans are indeed falling further behind on their BNPL payments. In 2024, 24% of BNPL users paid late at least once, up from 18% in 2023.

Another concern: As the popularity of BNPL grows and delinquencies increase, the credit industry is experimenting with ways to include BNPL payments in people’s credit scores. Starting in the fall, BNPL loans will start to affect certain versions of the FICO score. And, depending on the lender, the installment plans are already showing up on Experian and TransUnion credit reports.

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