Credit Card Installments Outrun BNPL in Summer Travel Surge

Consumers are adapting how they shop and pay as higher prices, inflation and tighter budgets reshape their financial routines. Pay Later has become a central part of the equation, with buy now, pay later (BNPL) and credit card installment plans increasingly vying as alternatives to traditional credit and store card use.

PYMNTS Intelligence’s latest research shows that credit card purchases paid in fixed installments over a predefined time frame—rather than in full, in monthly minimums or somewhere in between—surged 46% during the summer travel season. Meanwhile, BNPL usage remained stable, indicating that consumers aren’t shifting from BNPL to card installments. Instead, they’re toggling between the two Pay Later options and upping their usage of card installments. As card installments continue to grow faster than BNPL, this highlights the appeal of spreading payments over time using an existing card rather than opening a BNPL account at the point of sale.

Beneath these shifts lies a broader story about how Pay Later fits into a consumer’s everyday financial strategy. Shoppers increasingly rely on installments for both essentials and discretionary purchases, not just one or the other. 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. As Pay Later plays a bigger role in consumer spending, understanding when and why shoppers choose one method over another is essential for merchants, issuers and providers seeking to capture and retain customers.

These are just some of the findings detailed in this edition of The Pay Later Ecosystem Report, “Credit Card Installments Outrun BNPL in Summer Travel Surge,” a PYMNTS Intelligence exclusive report. This edition examines how consumers are using Pay Later as a part of their spending strategy. It draws on insights from a survey of 1,989 U.S. adult consumers conducted from Aug. 21, 2025, to Sept. 11, 2025.

• Travel Now, Pay Later
• Going Up-Market
• Essentials and Occasionals
• Budgeting With Pay Later
• Read More
• Methodology

Travel Now, Pay Later

Consumers ramped up their use of credit card installment plans—but not BNPL—during the recent summer travel season.

Credit cards are the workhorse of American consumer credit, with balances exceeding $1.2 trillion in the third quarter of 2025. PYMNTS Intelligence estimates the BNPL market in the United States at $175 billion, making it a sliver of the Pay Later ecosystem. But its massive growth since 2019, when it totaled roughly $2 billion, set card issuers on notice that buying goods and services using predictable installments was a wide-open market. By late spring and summer, the use of credit card installment plans soared 46% compared to April’s level. One in three consumers paid this way during the three months before our most recent survey, compared with 23% in our April survey.

Meanwhile, BNPL use held roughly stable, with slightly fewer consumers using it in the latest survey (14%) than in the April one (15%). This indicates that there is no simple shift underway from BNPL to card installments. Instead, BNPL is encountering a new challenge.

Whether by plane, rail, ship or rental car, travel fueled much of the increase in credit card installments. More than one-quarter (26%) of consumers in the September survey who made a recent travel or vacation booking paid with card installments. This was a 40% jump from April’s level, reflecting greater seasonal demand during the summer on top of fundamental shifts in payment preferences. Conversely, just 8% of consumers who paid for travel or vacation expenses used BNPL. Despite the summer travel surge, this was substantially lower than the 11% we saw in April.

Going Up-Market

Higher-income consumers are far more likely to use BNPL and credit card installments than lower-income consumers.

Consumers earning more than $100,000 per year stand out as the largest adopters of both credit card installment plans and BNPL. In fact, they are 57% more likely to pay with card installments and 71% more likely to use BNPL than those in the lowest income bracket (less than $50,000 per year). This wide gap highlights the strong appeal of Pay Later options to higher-earning consumers who want to maximize credit card rewards and stay financially flexible, not just to pay for purchases they cannot otherwise afford. Meanwhile, younger consumers have the strongest preference for card installments and BNPL. Gen Z showed the highest use of card installments (45%) and BNPL (24%), followed by millennials at 42% and 20%, respectively. ¹ The strong uptake of these Pay Later options among younger consumers underscores demand for flexible payment options in these crucial demographic segments.

Essentials and Occasionals

Consumers using BNPL usually do so for a mix of essentials and discretionary spending, not just one or the other.

A deeper dive into the BNPL data reveals a three-way split in usage patterns. Among consumers who purchased with BNPL in the last three months, 32% used it only for monthly or essential expenses. Conversely, 37% used it only for discretionary or occasional purchases. The remaining 31% used BNPL for both expense categories.

However, financially strained consumers tend to use BNPL less as a tool for splurges or convenience and more as a short-term budgeting aid to cover everyday costs and maintain spending stability. For example, over half (53%) of low-income consumers who made a recent purchase with BNPL used it only for essentials. More than seven in 10 who earn more used it to pay for discretionary purchases or a mix of basics and splurges. Similarly, consumers living paycheck to paycheck and struggling to pay their bills are more likely to use BNPL solely for necessities compared to those who can comfortably make ends meet.

There is less variation across age groups, but Gen Zers and baby boomers are far more likely than other age groups to use BNPL only for essentials. This reflects more limited spending power among many in these cohorts compared to millennials or Gen Xers.

Consumers also use credit card installments in ways similar to BNPL.

Turning to credit card installments, half of consumers who paid this way in the last three months did so for both essentials and discretionary purchases. This climbs to 61% for Gen Z, indicating that when younger consumers start using this payment method, they tend to keep coming back.

Respondents in the middle- (58%) and upper- (53%) income brackets also use credit card installments for both types of expenses at above-average rates. Interestingly, paycheck-to-paycheck status has little impact here, likely because credit card installments are confined to existing accounts. This means that consumers who have already maxed out a card or have a low credit limit will be unable to make larger purchases this way—unlike with BNPL, which grants users additional credit to cover the purchase.

Budgeting With Pay Later

Consumers who recently used Pay Later plans spent an average of more than $1,000 for both essential and discretionary purchases.

Consumers who paid with BNPL or credit card installments in the last three months spent similar amounts. Those who used BNPL for both essential expenses and discretionary purchases spent $1,070 on average. For credit card installments, this amount was only slightly higher, at $1,003. These spending averages are considerably higher than when consumers made only one type of purchase, suggesting that diversifying payment methods expands purchasing power and enables greater financial flexibility.

Despite the similar—and competing—payment terms provided by BNPL and credit card installments, consumers prioritize different benefits for each. BNPL users are most drawn to the flexibility of choosing a payment frequency that works within their monthly budget. By contrast, for credit card installments, users are primarily motivated by the ability to collect loyalty points or cash back. This reflects the fact that card installments allow consumers to use their favorite credit cards to match them to the purchases that generate the best rewards.

Read More

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• Split Shift: How Card Installments Are Reshaping the Pay Later Landscape
• Pay Later Revolution: Redefining the Credit Economy

Methodology

“Credit Card Installments Outrun BNPL in Summer Travel Surge” is based on a survey of 1,989 U.S. adult consumers conducted from Aug. 21, 2025, to Sept. 11, 2025. The report examines consumer use of buy now, pay later and credit card installment plans. Our sample comprised respondents who made at least one type of purchase in the last three months. The respondent pool was 50.7% female, had an average age of 48.1 years and 40.9% earned more than $100,000 a year.

^{1. PYMNTS Intelligence uses the following birth dates and approximate age ranges in 2025 for generational cohorts: baby boomers: born in 1964 or earlier and now aged 61 or older; Generation X: born between 1965 and 1980 and now aged 45–60; millennials: born between 1981 and 1996 and now aged 28–44; bridge millennials: born between 1978 and 1988 and now aged 37–47; zillennials: born between 1991 and 1999 and now aged 25–34; and Generation Z: born in 1997 or later and now aged 28 or younger.↩}