56% of Gen Z Struggle to Track When Installment Payments Are Due

For many consumers, pay later is shifting from a checkout convenience to a budgeting tool.

The biggest drivers of the shift are millennials and their slightly older counterparts, who are using installment plans and buy now, pay later (BNPL) services more often than other generations.

That trend appeared in “The Pay Later Ecosystem Report: Pay Later Moves Into the Monthly Budget,” a PYMNTS Intelligence report that examined how consumers in the United States use deferred payment tools. Based on a survey of 2,743 consumers conducted in December, the research found that pay-later services are increasingly woven into everyday spending patterns rather than occasional purchases.

The report showed that generational differences are shaping how these products are used, how often consumers rely on them and how easily they manage the payments that follow.

Millennials and so-called bridge millennials, the overlap between older millennials and younger Generation X consumers, are leading the shift. Both groups increased their use of credit card installment plans and BNPL products during the latest quarter, even as overall usage cooled slightly across other age groups.

Key findings from the report include:

In the last three months, 45% of millennials used credit card installment plans, compared with lower usage among other age groups. Bridge millennials followed closely at 42%, highlighting the strong appeal of installment financing for consumers in their peak spending years.

About 25% of millennials and bridge millennials used BNPL during the same period. That share was higher than the rates reported by Gen X, Generation Z or baby boomers.

The share of Gen Z users reporting difficulty keeping track of store card installment payments was 56%, while 47% said the same about credit card installments. Young consumers were the most likely to experience friction when managing these payment plans.

The generational patterns extend beyond simple usage rates. Millennials and bridge millennials were also more likely to pay interest or fees on their BNPL plans. About 39% of bridge millennials and 34% of millennials said they paid interest on at least one BNPL plan in the past three months, compared with 29% of Gen Z users and only 14% of baby boomers.

Many consumers treat interest-bearing payment plans as a deliberate financial tool rather than a signal of financial distress. BNPL users who do not live paycheck to paycheck were more likely to pay interest than those struggling to pay their bills.

As pay-later tools move deeper into everyday spending, another challenge is emerging. Tracking the payments tied to each purchase can be difficult. Unlike traditional credit cards that generate one monthly statement, many BNPL plans are linked to individual transactions with their own schedules and due dates.

Nearly 4 in 10 consumers who use credit or store card installment plans said it is at least somewhat difficult to keep track of payments.

Among BNPL users, about one-quarter said they are usually or always unsure about when their next payment is due or how many installments remain. Young consumers face the biggest hurdles. Many said they lose track of payment schedules at least occasionally.

For banks, merchants and FinTech providers, the findings point toward new opportunities. As pay-later services evolve from a financing feature into a budgeting habit, consumers will likely expect better tools to track payments and manage their plans in one place.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.