Private-Label Installments Growing Faster Than Traditional Credit Cards

Traditional credit cards are facing pressure in the battle for consumer spending power. While general-purpose cards remain the workhorse of American credit, their use for installment payments is growing far more slowly than private-label store cards — a shift driven, as PYMNTS Intelligence has found, largely by younger consumers who prefer predictable, interest-free options over revolving debt.

Private-label installment plans, often offered by retailers for larger-ticket items, are expanding at a compound annual growth rate of 4.8% over the past two years, compared with just 0.8% for traditional card-based installment use.

Though private-label cards still represent a smaller share of the overall credit landscape, the pace of their growth signals a meaningful shift in consumer behavior.

Retail-branded cards are finding traction not only among middle-income households but also with Gen Z shoppers, who boosted their use of store card installments by nearly 20% between 2023 and 2025.

Their appeal is simple: they’re often easier to obtain than traditional credit, come with loyalty perks and promotional financing, and let consumers spread out payments on everything from furniture to electronics without the sting of higher interest rates.

Predictability and Control

The report underscores a broader consumer desire for predictability and control. Shoppers are less interested in revolving balances and more in slicing purchases into manageable payments that don’t balloon with compounding interest. That desire is strongest among younger generations — but it’s spreading across demographics, from middle-income families to baby boomers rediscovering the appeal of fixed-payment plans.

Traditional installment growth stalls: Only 47.8 million U.S. consumers used general-purpose credit cards for installment payments through May 2025, up just 0.8% annually from 47.2 million in August 2023.

Private-label installment growth accelerates: 30.3 million consumers used store cards for installments in May 2025, up from 27.9 million in August 2023 — a 4.8% annualized increase.

Younger consumers drive adoption: Gen Z usage of private label installments grew nearly 20% in two years, while millennials added modest growth of 0.8% annually. By contrast, Gen X usage fell slightly.

Younger consumers’ comfort with structured repayment is reshaping expectations, blurring the line between credit cards and buy now, pay later (BNPL) options. The slow adoption rate for installment use on general-purpose cards suggests that banks and networks will need more than cashback rewards to keep pace with retailers’ tailored offers.

For banks and card issuers, the message is as straightforward as it is challenging: private label installments may be growing from a smaller base, but they are capturing the loyalty — and the spending “share” — of the very consumers who will define the next generation of credit.