BNPL Popularity Surges Even Among People With Credit Cards

4 2 minutes read

We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. Learn more.

Buy now, pay later loans are no longer just for Gen Zers with a penchant for online shopping splurges. Even individuals who already have access to credit and other payment methods are embracing the convenience of installment plans.

Once considered a niche payment option predominantly used by younger Americans lacking the means to make large purchases upfront, BNPL plans have now entered the mainstream. A recent survey by the research firm YouGov revealed that 82% of U.S. adults who are satisfied with their credit cards are now utilizing BNPL services.

According to the report, “While BNPL is often seen as an option for people looking beyond credit cards, the data shows something different.”

Usage of BNPL has seen a significant surge overall. In 2021, YouGov data indicated that 4% of Americans used BNPL options, a figure that has now risen to 26%. The report, published in August, was based on survey responses from a representative sample of U.S. adults, including credit cardholders and BNPL users.

Additional estimates suggest that BNPL’s popularity may be even more widespread. A survey by marketing firm PartnerCentric found that 52% of U.S. adults use BNPL services. Furthermore, credit bureau TransUnion determined that approximately 130 million U.S. consumers, equivalent to about half of all U.S. adults, have taken out a BNPL loan in the past year.

Why is BNPL Gaining Popularity?

BNPL emerged in 2012 as an alternative to traditional credit, allowing shoppers to split payments over time, typically several weeks, with minimal or no interest. Initially limited to select online retailers, BNPL companies have since expanded their services to encompass a wide range of purchases, from a burrito at Chipotle to tickets for events like Coachella.

In a bid to enhance accessibility, BNPL providers like Klarna and PayPal have introduced physical debit cards that offer BNPL features for in-store purchases. Convenience has become a key driver of BNPL adoption, with the top two reasons cited for usage being the ability to spread payments over time and ease of use.

However, some experts caution that this convenience could lead individuals into a cycle of debt. Alaina Fingal, an accountant and owner of The Organized Money, expressed concerns about consumers relying on BNPL for essential expenses, potentially fostering a dependence on loans for everyday needs.

Recent data from the Federal Reserve indicates a rise in late payments among BNPL users, with 24% paying late at least once in 2024, up from 18% in 2023. Moreover, as BNPL popularity grows and delinquencies increase, the credit industry is exploring ways to incorporate BNPL payments into credit scores, with certain versions of the FICO score set to include BNPL loans starting in the fall.