The real action is not only in buy now, pay later services. It is in the rapid rise of installment plans tied to credit cards. That change signals a potential realignment in how millions of consumers in the United States borrow for everyday purchases.
The PYMNTS Intelligence report “Split Shift: How Card Installments Are Reshaping the Pay Later Landscape” finds that installment options offered by private-label and general-purpose credit cards are gaining momentum with middle-income shoppers, as well as young and old consumers.
The study, based on 8,250 U.S. adults surveyed from late March through late May, shows that while BNPL providers continue to grow, card-based installments are expanding across more categories and attracting more types of consumers. The report lays out a pay later ecosystem in which shoppers mix traditional credit, store cards and BNPL with increasing frequency, often in search of predictability and control.
Key data points from the report include:
- Private-label card installment usage grew from 27.9 million adults in 2023 to 30.3 million in May. That is a compound annual growth rate of 4.8%, driven by middle-income shoppers and Generation Z. Gen Z’s 19.6% growth rate is the highest among all generations.
- Installments on general-purpose credit cards rose from 47.2 million users in 2023 to 47.8 million in May, a slower 0.8% annual growth rate, yet still a large base. One in seven Gen Z and millennial consumers used card installments during the three months ending in May.
- Nearly 22 million consumers used a private-label card and a general-purpose card to make installment payments in May. That reflects a 5.3% growth rate since 2023 and signals a shift toward mixing payment tools.
Beyond the top findings, the report highlights deeper currents shaping the pay later market.
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One is the rising appeal of predictable payment schedules. Regardless of income, many consumers want fixed monthly amounts rather than variable credit card bills, especially for categories such as travel, concerts, home goods and groceries.
Another is the broadening of BNPL’s customer base. The service now attracts a range of users, including high earners with multiple credit cards. BNPL’s growth rates show steady gains across every generation, with increases of more than 6% to nearly 13% depending on the age group.
The research also shows that card issuers are not standing still. Many banks now offer Pay in 3 or Pay in 4 plans that mirror BNPL terms and give cardholders the option to convert purchases into installments after the transaction. This approach attempts to keep spending on traditional cards while meeting consumer demand for clarity and structure.
Store cards are benefiting from another trend. Their installment plans often come with 0% promotional rates or long payoff windows, especially for big-ticket household items. Retailers such as furniture chains use these incentives to compete for financing volume. Young consumers who may have shorter credit histories also tend to qualify more easily for store cards, which helps fuel adoption.
BNPL remains the fastest-growing segment, but private-label and general-purpose card installments are changing the balance of consumer credit. If the trend continues, payment providers will need to rethink how they structure products for shoppers who increasingly expect financing to be simple, predictable and tailored to their budgets.
