High-Income Shoppers Spend 40% More on BNPL Than Lower Earners

Shoppers in the United States aren’t just swiping their credit cards; they’re splitting them.

The PYMNTS Intelligence report “Split Shift: How Card Installments Are Reshaping the Pay Later Landscape” shows that the rise of installment plans on general-purpose and store-branded cards is beginning to reshape consumer credit, diverting attention and dollars from buy now, pay later (BNPL) providers.

What seems like a comeback for cards may be consumers redefining loyalty around predictability rather than points.

The study, based on 8,250 consumer responses, finds that while BNPL adoption continues to expand, the faster growth is happening inside card networks.

Store-branded cards, once dismissed as relics of department-store shopping, are drawing in middle-income households and young consumers like Generation Z, while general-purpose card issuers are pushing installment conversions to hold onto high-value customers.

That trend raises a question. In the new predictable-payment economy, will credit cards stop being revolving debt products and instead evolve into installment engines?

The report highlights several data points that illustrate the gap between consumer perception of BNPL dominance and the reality of card-based installments:

• Private-Label Momentum: Installment use on store cards grew at a compound annual rate of 4.8% between 2023 and 2025, compared with just 0.8% for general-purpose card installments. The growth was sharpest among Gen Z, whose usage climbed nearly 20% over the same timeframe.
• Generational Adoption: Young and old consumers are driving change. Gen Z boosted card installment use by 8.7%, while boomers and seniors expanded store and credit card installments by 11%, undercutting the idea that flexible payment products are only for the young.
• Mix-and-Match Payments: Nearly 22 million consumers used a private-label card and a credit card to make installment payments by May, up from 19.8 million in 2023. That 5.3% growth rate outpaced either card type alone, suggesting shoppers increasingly blend payment methods to manage cash flow.

The appeal of installments has less to do with interest rates or rewards and more with predictability. Shoppers want to know exactly when money will leave their accounts. That logic holds across a variety of payments use cases, whether they’re booking a vacation, buying groceries or covering a medical bill. Credit card issuers are responding by mimicking BNPL’s Pay in 4 playbook, converting purchases post-transaction into biweekly or monthly installments, often at little or no interest.

For banks, the shift is more than tactical. Installments may be the only way to prevent high-income households, the very group that spends 40% more on BNPL than lower earners, from defecting entirely to FinTechs.

For merchants, meanwhile, store-branded cards with installment perks are becoming tools for brand loyalty as potent as discounts or reward points.

The report also finds that parents of young children are a standout group, putting $1,076 on credit card installment plans in the last quarter, more than they spent on either BNPL or traditional card payments. While BNPL remains the fastest-growing single category, expanding at a 9% compound annual rate, the fact that installment spending on cards is already surpassing BNPL in categories like travel, concerts and groceries suggests the real competition isn’t between products, but between payment philosophies.

For issuers, retailers and FinTechs, the lesson is that consumers no longer see credit as a monolith. They see it as a menu of predictable, divisible choices. The battle for pay later may not be about who offers the cheapest credit, but who offers the clearest calendar.

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