Buy Now, Pay Later services were originally intended to be a form of short-term financing, to spread payments out for different types of purchases across a relatively short period of time. But new evidence suggests that more consumers are using BNPL as “lifelines” that help them get by until they receive their next paycheck. A new report from LendingTree reveals that 27% of consumers are using BNPL services as bridge loans to help them make ends meet. More than one-fifth of consumers, for example, have used BNPL services to pay for groceries, according to the results of the survey.
“The fact that buying groceries with BNPL has become so common is surprising,” wrote the authors of the report. “We knew it was happening but didn’t realize it was widespread.”
Nearly half of Americans have used some form of BNPL service, up from 43% a year ago and 31% the year before that, according to LendingTree. More than half of those who have used BNPL regret using it to finance a purchase and two-thirds of consumers prefer using credit cards because they allow purchases to be stretched out further than BNPL plans.
Interestingly enough, consumers with higher incomes are the ones most likely to use BNPL to help them get by to their next paycheck. Thirty-two percent of consumers making at least $100,000 a year have done so, compared with 25% of those who make less than $35,000 a year. Men are more common than women to use BNPL as a bridge, and younger consumers are doing it more often than older consumers are.
Forty percent of consumers have made a payment on a BNPL purchase late, according to the survey.
