Consumers are reshaping how they use credit, and PYMNTS Intelligence data shows that installment plans are becoming a central tool for managing cash flow in both predictable and discretionary spending.
The shift reaches well beyond summer travel patterns. It signals a broader realignment in how households balance flexibility, rewards and affordability.
The report, “The Pay Later Ecosystem Report: Credit Card Installments Outrun BNPL in Summer Travel Surge,” shows that consumers are not moving from buy now, pay later (BNPL) products to credit card installments. Instead, they are using both options to match payment plans with specific financial needs.
The study is based on a survey of 1,989 U.S. consumers conducted from late August to early September. It suggests that pay-later options are becoming part of an everyday budgeting strategy in which shoppers rely on installments to navigate higher prices and tighter monthly liquidity. These tools help smooth expenses and keep spending predictable.
Among the findings:
- Credit card installment usage rose 46% during the survey period compared with April levels. The study found 1 in 3 consumers paid for at least one purchase this way, up from 23% in the spring.
- BNPL usage held steady at about 14%, showing no sign that consumers are abandoning the method even as card-based installments grow faster.
- Consumers using pay later for both essentials and discretionary categories spent more than $1,000 on average over three months, compared with notably lower totals among those who limited installments to a single category.
Beyond the seasonal surge in travel spending, the report shows that higher-income and younger consumers are driving increased adoption of both BNPL and credit card installment plans. Households earning more than $100,000 annually are 57% more likely to use card installments and 71% more likely to use BNPL than the lowest-income consumers. These users are not turning to pay-later options for budget relief alone.
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Many are tapping installments to maximize card rewards, preserve available credit and exercise more control over when and how payments come due. The trend is strongest among Gen Z and millennials, who show the highest usage rates for both products.
The findings also reveal how consumers divide spending between essential and occasional purchases. BNPL users split nearly evenly across essentials, discretionary purchases and a mix of the two. Lower-income shoppers rely on BNPL more heavily for groceries, utilities and recurring household costs. Younger users and higher earners tend to employ both BNPL and card installments more broadly, distributing payments across categories in ways that support larger average outlays. Spend patterns show that consumers who diversify their pay later usage expand purchasing power and maintain more stable cash flow. This behavior reflects an evolving credit strategy in which payment flexibility is just as important as access to credit.
Other findings in the report illustrate the dual appeal of pay-later products. BNPL users prioritize adjustable payment frequency, which helps them align repayment schedules with variable monthly budgets. Card installment users place greater weight on loyalty programs and cash-back incentives, which strengthen the link between installment spending and rewards programs.
These distinctions matter for issuers, merchants and platforms competing to remain top of wallet. They also point to a credit landscape in which consumers are exercising more intentional and more strategic control over their spending. They are moving with purpose.
