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

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.