Pay Later has stopped being a seasonal convenience and started to look like a standing line item in how many households manage money.
That is the broader takeaway from PYMNTS Intelligence’s Pay Later Ecosystem Report, titled “Credit Card Installments Outrun BNPL in Summer Travel Surge.”
While the headline finding focuses on travel, there are deeper implications for consumer behavior. Consumers are not simply responding to higher airfare or vacation costs.
They are restructuring how they smooth cash flow across months, blending installment plans into everyday budgeting decisions.
The report finds that fixed installment plans on existing credit cards are growing faster than buy now, pay later services, even as both remain widely used.
Consumers are not abandoning buy now, pay later (BNPL). Instead, they are toggling between tools based on context. Installments on cards appeal because they sit inside familiar accounts, preserve rewards and avoid opening new credit lines at checkout.
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BNPL, by contrast, remains attractive for its flexible payment schedules and frictionless approval. Together, they form a Pay Later ecosystem that increasingly rivals traditional revolving credit.
Several data points illustrate how firmly these options are taking hold beyond travel.
- 46% surge in credit card installment use during late spring and summer compared with April levels, even as BNPL usage held roughly flat at 14% of consumers.
- 57% higher likelihood that consumers earning more than $100,000 use credit card installments compared with those earning under $50,000, underscoring that Pay Later is not limited to financial stress.
- $1,000-plus average spending over three months among consumers who use Pay Later for both essentials and discretionary purchases, materially higher than those using it for only one category.
What stands out is how often Pay Later shows up in routine expenses. Groceries, utilities, food delivery and subscriptions are now commonly paid using installments or BNPL, not just large discretionary purchases.
For financially strained households, BNPL often functions as a short-term budgeting bridge for necessities. More than half of lower-income BNPL users rely on it solely for essential spending. Higher earners use the same tools to manage cash flow while maximizing rewards and liquidity.
Age also matters. Younger consumers lead adoption across both models. Gen Z reports the highest use of credit card installments at 45% and BNPL at 24%. Once younger consumers start using card installments, many continue.
More than six in 10 Gen Z installment users apply them to both essentials and discretionary purchases. That pattern suggests habit formation rather than experimentation.
The report also highlights a subtle but important difference between the two models. Credit card installments are constrained by existing credit limits. BNPL often extends incremental credit at the point of sale. That distinction shapes who uses each product and when. Consumers living paycheck to paycheck show little variation in installment use, likely because access depends on available card limits. BNPL fills gaps when cards cannot.
Another divergence lies in motivation. BNPL users cite payment flexibility as the primary draw. Card installment users point to rewards and cash back.
This difference matters for issuers and merchants designing offers and checkout flows.
Taken together, the findings suggest Pay Later has matured into a structural feature of consumer finance. It is no longer a niche alternative or a travel-only tool. It is a budgeting mechanism layered on top of traditional credit. It changes how consumers plan, spend and repay. It also raises the stakes for issuers competing to remain top of wallet. This shift is not temporary. It is durable.
