45% of Consumers Used Credit Card Installment Plans In Past Year

Installment plans allow consumers to pay for a purchase over time and are popular among all consumers. Merchants can get ahead by offering this payment method.
Installment plans have become an increasingly important payment method that many shoppers prefer. Across age groups and income brackets, 60% of consumers use installment plans at least occasionally. The highest rates are among younger generations and high-income earners.

Merchants can maximize their competitiveness by offering installment plans — and should do so while their customers are still actively shopping.

These are just some of the findings detailed in “Installment Plans Becoming a Key Part of Shopper’s Toolkit,” a PYMNTS Intelligence and Splitit collaboration. This edition examines consumers’ use of installment plans for everyday purchases and draws insights from a survey of 2,572 consumers conducted from Aug. 8 to Aug. 12.

Other key findings from the report include the following.

Millennials and high-income earners drive the widespread adoption of installment plans for everyday purchases.

Consumers in younger age groups and higher income brackets use installment plans the most. Seventy-three percent of bridge millennials and 72% of millennials paid this way at least once in the last year. Dispelling notions that installment plans only appeal to cash-strapped shoppers, 64% of consumers annually earning more than $100,000 used them in the last year.

Financial flexibility and convenience are the key drivers behind installment plan use.

Seventy-four percent of installment plan users said they pay this way because it helps them manage spending. This was by far the most cited reason, with convenience following at 57%. Surprisingly, just 24% of installment plan users named the inability to afford the purchase otherwise as a reason.

Most consumers want to know about installment plan options before they click “checkout.”

Sixty-six percent of consumers said they want merchants to introduce installment plan options before the checkout process begins. Just 23% favored reviewing plan options during checkout, and 11% preferred doing so after making the purchase.

Failing to present shoppers with installment plan options can cause merchants to lose sales. Twenty-two percent of consumers said they are highly likely to migrate to competitors that offer installment plans. Download the report to learn why consumers choose or avoid installment plans — and why merchants should offer them before checkout.