14% of Consumers Use BNPL Even After Holiday Spending Surge

Buy now, pay later is no longer just a checkout feature. It is becoming a line item in the monthly household budget.

That is the central shift identified in “The Pay Later Ecosystem Report: Pay Later Moves into the Monthly Budget,” a February study from PYMNTS Intelligence.

Drawing on a December survey of 2,743 U.S. consumers, the report finds that installment plans on credit cards, store cards and standalone BNPL products are increasingly used to manage cash flow, not just to finance large or seasonal purchases. As these tools become routine, the operational burden moves from approving the transaction to tracking due dates, balances and remaining payments.

The risk for providers is no longer confined to credit exposure. It is whether consumers can keep up with the administrative load that comes with fragmented payment schedules.

Key Data Points:

31% of consumers used credit card installment plans in the prior three months, while 14% used BNPL, even after a slight December pullback despite record holiday spending.

Among consumers living paycheck to paycheck, 36% used credit card installment plans and 18% used BNPL in the last three months, compared with 25% and 9% respectively for those not living paycheck to paycheck.

31% of BNPL users paid interest in the past three months and 28% paid account or usage fees, blurring the distinction between installment products and traditional revolving credit.

Millennials and bridge millennials are driving much of the growth. Forty-five percent of millennials and 42% of bridge millennials used credit card installment plans in the last three months, and one-quarter of each group used BNPL. That concentration among prime working age consumers suggests these products are integrating into mainstream financial behavior rather than remaining niche tools for younger shoppers.

Perhaps the most counterintuitive finding is that paying interest on BNPL is not always a signal of distress. BNPL users who do not live paycheck to paycheck are 1.5 times more likely to pay interest than those who struggle to pay bills, 36% versus 24%.

Many consumers appear to be selecting longer term installment options offered at the point of sale, even when zero interest alternatives are available. The choice reflects preference and planning as much as necessity.

Yet convenience carries a cognitive cost. Nearly 4 in 10 consumers who used credit or store card installment plans say it is at least somewhat difficult to keep track of payments due, roughly twice the rate reported by users of traditional one-time credit card purchases. One-quarter of BNPL users say they are usually or always unsure about their next payment date or how many payments remain. Gen Z and millennials report the most friction, particularly when BNPL is used for essential or recurring expenses.

This is where the competitive stakes are shifting. As installment products embed themselves in everyday spending, differentiation will hinge on visibility and integration. Consolidated statements, automated reminders and clearer dashboards may matter as much as underwriting models. The checkout button is no longer the decisive moment. Ongoing management is.

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.