Full Breakdown
Shifts in Consumer Payment Preferences: Credit Card Installments Outpace BNPL
11/27/2025, 5:28:50 AM
Surge in Credit Card Installments During Summer Travel
Recent research from PYMNTS Intelligence highlights a significant shift in consumer payment preferences, particularly during the summer travel season of 2025. Credit card installment plans saw a remarkable 46% increase in usage compared to earlier in the year, with one in three consumers opting for this payment method. In contrast, the usage of buy now, pay later (BNPL) services remained relatively stable, with a slight decrease from 15% to 14% among consumers. This indicates that rather than a direct transition from BNPL to credit card installments, consumers are increasingly utilizing both options based on their needs.
Demographic Insights and Spending Patterns
The report reveals that higher-income consumers, particularly those earning over $100,000 annually, are more likely to use both credit card installments and BNPL services. They are 57% more inclined to use credit card installments and 71% more likely to utilize BNPL compared to those earning less than $50,000. Among younger consumers, Generation Z leads in the adoption of these payment methods, with 45% using credit card installments and 24% using BNPL.
Consumers are using these payment options for a mix of essential and discretionary purchases. For credit card installments, 50% of users reported utilizing this method for both categories, while BNPL users also showed a diverse spending pattern, with 32% using it solely for essentials and 37% for discretionary purchases.
Consumer Behavior and Financial Flexibility
The findings suggest that flexible payment options are becoming integral to consumer spending strategies. Those using credit card installments and BNPL spent an average of over $1,000 when utilizing both types of purchases, indicating that these payment methods enhance affordability and financial flexibility. Notably, consumers who rely on BNPL often do so as a budgeting tool, particularly among lower-income groups, where over half use it exclusively for essential expenses.
Official Statements & Responses
PYMNTS Intelligence emphasizes the importance of understanding consumer behavior regarding payment methods. As credit card installments continue to grow, merchants and financial institutions must adapt to these changing preferences to effectively capture and retain customers.
Criticism & Opposition
Despite the positive trends for credit card installments, some critics argue that the reliance on such payment methods may lead to increased consumer debt. Financial experts caution that while these options provide immediate financial relief, they could also encourage overspending, particularly among those with limited financial literacy.
Verbatim Quotes
- “They spend the most when they mix these categories, often topping $1,000 over three months, suggesting that flexible payment plans expand affordability while helping smooth month-to-month cash flows and leverage financial flexibility.” — PYMNTS Intelligence
- “Shoppers increasingly rely on installments for both essentials and discretionary purchases, not just one or the other.” — PYMNTS Intelligence
- “Higher-income consumers are far more likely to use BNPL and credit card installments than lower-income consumers.” — PYMNTS Intelligence
- “1 The strong uptake of these Pay Later options among younger consumers underscores demand for flexible payment options in these crucial demographic segments.” — PYMNTS Intelligence
What's Next
As consumer preferences continue to evolve, further research will be necessary to monitor the long-term impacts of these payment methods on consumer behavior and financial health. Financial institutions and merchants will need to stay informed about these trends to align their offerings with consumer needs effectively.
