High Earners Help Banks Take the Lead in Installments

§ 01 Executive Snapshot

• What: Credit card installment plans are now leading over buy now, pay later (BNPL) offerings in consumer usage.
• Who: PYMNTS Intelligence, high-income consumers, banks, and FinTechs.
• Why it matters: The shift indicates a change in how consumers view installment lending, impacting lenders' strategies and risk profiles.

§ 02 Key Developments

• Credit card installment usage increased from 23% in April 2025 to 36% in March 2026.
• BNPL usage remained largely unchanged at around 15% during the same period.
• High-income consumers (earning at least $150,000) reported BNPL usage of 19% in April 2025, compared to 10% among low-income consumers (earning less than $50,000).

§ 03 Strategic Context

• The traditional view of installment lending as a means to broaden credit access is evolving; it is now seen as a feature within existing banking relationships.
• Affluent consumers are increasingly using installment products for payment flexibility rather than as a necessity, indicating a shift in market dynamics.

§ 04 Strategic Implications

• Lenders may see improved credit risk profiles and higher transaction values as affluent consumers utilize installment products more frequently.
• Banks can leverage existing relationships to enhance customer engagement and reduce acquisition costs in the installment lending space.

§ 05 Risks & Constraints

• FinTechs and standalone BNPL providers may struggle to compete if they cannot integrate financing into broader commerce experiences.
• A potential risk exists in the form of shifting consumer preferences, which could impact the growth of traditional BNPL offerings.

§ 06 Watchlist / Forward Signals

• Monitoring the adoption rates of credit card installments versus BNPL offerings will provide insights into consumer behavior.
• Future developments in customer engagement strategies from banks and FinTechs will signal how well they adapt to the changing landscape of installment lending.