Half of Americans Use Buy Now Pay Later Services

More than half of Americans have used buy now pay later services for an online purchase at least once, according to a Gallup poll released Monday. S. 2 billion, according to a 2022 Consumer Financial Protection Bureau report.

Buy now pay later plans allow consumers to spread payments for everyday items including groceries, household goods, and holiday purchases into short-term installments, often without interest or a hard credit check. The services first appeared through apps such as Klarna and Affirm and have since expanded to major retailers nationwide.

Americans earning under $48,000 annually were more likely to use installment plans frequently or occasionally than middle- or higher-income households, the Gallup poll found. A 2024 Federal Reserve survey showed 57 percent of users said they relied on the service because they could not otherwise afford the purchase.

Among consumers with credit scores below 620, 84 percent reported using buy now pay later out of necessity, according to a study published last year in the Journal of Consumer Affairs.

99 in 2023. Nearly half of users said they had made at least one late payment in the past year, according to a LendingTree survey published last month. FICO announced last year that it would begin incorporating buy now pay later data into credit scores.

U.S. consumer debt reached $19 trillion in the first quarter of this year, according to the Federal Reserve. Delinquencies on multiple loan types have reached historic highs in recent years, concentrated among lower-income borrowers. Gallup found that 10 percent of Americans rely on these plans often, though heavy use remains concentrated among credit-constrained households.