Buy Now, Pay Later (BNPL) loans are increasingly becoming a regular part of how many consumers manage their finances, particularly homeowners balancing mortgage payments and other debts. While BNPL spending has grown rapidly in recent years, new research from the JPMorganChase Institute suggests its role in household finances goes beyond simple checkout convenience.
BNPL spending increased dramatically from about $2 billion in 2019 to roughly $75 billion in 2023. Even with that growth, BNPL remains relatively small compared with traditional credit products. In 2024, BNPL transactions represented about 2.7% of large bank credit card purchase volume.
Still, adoption has been widespread. About one in five consumers reported using BNPL at least once in 2022. Usage is more common among younger consumers and those with lower credit scores, but the research shows it is present across all income and credit levels.
One challenge for lenders and credit professionals is visibility. Many short term Pay-in-4 BNPL loans are not consistently reported to credit bureaus. That means these obligations often do not appear in traditional credit reports, making it harder to understand a consumer’s full financial picture.
Where BNPL Fits in Household Finances
Researchers examining millions of homeowners found that BNPL usage tends to rise when budgets become tight.
Key patterns include:
- Higher usage when credit cards are maxed. Homeowners with higher credit card utilization and tighter budgets are significantly more likely to use BNPL.
- Lower usage when savings increase. Consumers with larger deposit balances and stronger credit scores tend to rely less on BNPL.
- BNPL often complements credit cards. Rather than replacing revolving credit, BNPL is frequently used alongside other debt obligations.
Because mortgages are typically the largest fixed expense in a household budget, researchers focused on how mortgage borrowers use BNPL to manage cash flow pressures.
Usage Spikes Around Major Life Events
The research found that BNPL usage increases around significant financial transitions.
For example, frequent BNPL users reduce credit card balances by about 12% to 13% in the year leading up to purchasing their first home. After closing, however, their BNPL usage rises sharply, increasing nearly fourfold compared with pre purchase levels.
Job loss also leads to higher reliance on BNPL. Among lower income homeowners with FHA mortgages, BNPL can account for more than 20% of spending following unemployment.
Link to Mortgage Payment Stress
The study also examined whether heavier BNPL use is associated with mortgage performance. Among first time homebuyers who used BNPL, those classified as frequent users were more likely to experience early stage payment stress.
Within one year of purchase, frequent BNPL users had more than double the rate of early mortgage delinquency compared with infrequent users. After adjusting for credit scores and other financial indicators, a one standard deviation increase in BNPL intensity was associated with about an 8% higher likelihood of a 30-day mortgage delinquency.
Researchers caution that the relationship reflects correlation rather than causation. Still, the findings highlight how BNPL has become embedded in many households’ broader credit strategies.
For lenders, collection professionals, and financial institutions, the data offers a clearer picture of how consumers are using these products to manage short term financial pressure. As BNPL adoption continues to expand, understanding how it interacts with traditional credit products will become increasingly important.
