Buy now, pay later was billed as the credit card killer. A year of consumer data suggests it did something different: it taught card issuers how to compete.
New PYMNTS Intelligence research from its forthcoming Pay Later Ecosystem Report finds that consumers are embracing installment payments at a rapid clip, but they are increasingly getting them from the credit cards already in their wallets rather than from standalone BNPL providers. Across eight surveys of roughly 2,500 U.S. adults, consumers used credit card installment plans at more than twice the rate of BNPL.
The gap is widening. Credit card installment use climbed from 23% of consumers in April 2025 to 33% by March 2026, while BNPL usage was essentially flat, slipping from 15% to 14% over the same period.
The generational data cuts against the prevailing narrative. BNPL has long been framed as a product for younger consumers, and younger consumers are indeed the heaviest installment users. But they are not choosing BNPL apps to get there. Gen Z credit card installment use jumped from 31% to 47% over the survey period, while BNPL use among the same cohort inched from 21% to 23%. Millennials and bridge millennials followed the same pattern, using card installments at roughly 1.8 to 2.5 times the BNPL rate in every survey.
Income tells another surprising story. Despite BNPL’s positioning as a financial inclusion tool for credit-constrained consumers, high earners use it most. Consumers earning at least $150,000 annually used BNPL at roughly twice the rate of those earning under $50,000 across the entire series, with the gap peaking in November at 22% versus 7%. By March, it stood at 20% versus 10%. The order never flipped.
That pattern suggests Pay Later is functioning less as a safety net for stretched households and more as a cash flow management tool for consumers who could pay in full but prefer not to.
