Gen Z Drives Notableโ Growth in “Pay in installments” Options
Aโข recentโ report reveals a considerable increase โin the use of installmentโค paymentโ plans, with store card installments experiencing a โฃparticularly dramatic surge of 19.6% as 2023. This growth is largely fueled by Gen Z consumers,alongside increasing adoption across all โคgenerations.
68.3 million consumers utilized some form of “pay in installments” plan โin May, representing aโ 13.8% increase year-over-year. While โฃBuy โnow, Pay Later (BNPL) remainsโข the fastest-growing segment, conventional credit cards are adapting to meet consumer demand for flexible payment options.
Installments on general-purpose credit cards rose from 47.2 million users โin 2023 to 47.8 million in May, a slower growth โrate ofโค 0.8% annually, but still โฃrepresentingโ a significant user base. During the three months โขending inโ May, one โin seven Gen Z and millennial consumers utilized cardโค installments.
The reportโ alsoโ highlightsโ a growingโค trend of consumers combining payment methods, with nearly 22 million usingโ both a private-label card and a general-purpose card for installment payments โค- โa 5.3% increaseโ since 2023.
Beyond the numbers,the research points โขto aโข consumer preference forโข predictable payment schedules,irrespective of income. Many shoppers desire fixed monthly amountsโฃ over variable credit card bills, particularly for expenses like travel, concerts, home goods, andโค groceries.โ
BNPL is also broadeningโฃ its appeal, attracting a wider range of users, including high earners with existing credit cards.Growth rates โare consistently โpositive across every generation, ranging from increases โof moreโฃ thanโ 6% โคto nearly 13% โdepending on age group.
Card issuers โขare responding by offeringโ their own installment plans, such as “Pay in 3” or “Pay in โ4,” mirroring BNPL terms and allowing cardholders to โconvert purchases into installments post-transaction. Store cards are also benefiting, often offering 0% promotional rates or extended payoff windows,โฃ particularly for larger purchases. These incentives are especially attractive to younger consumers with shorter credit histories who may find โit easier to qualify for โstoreโ card financing.
The increasing popularity of installment plans โขsuggestsโ aโ shiftโ in โคconsumer expectations, demanding financing options that are simple, predictable, and aligned with individual budgets.Paymentโ providers will โขlikely need to adapt theirโ product structures to meet thisโฃ evolving landscape.
