Payment Preference or Necessity: Who Uses BNPL and Why

Jeff Larrimore, Alicia Lloro, Zofsha Merchant and Anna Tranfaglia

Journal of Consumer Affairs, 2025, vol. 59, issue 3

Abstract: Using survey data from the Federal Reserve on buy now, pay later (BNPL) experiences merged with individual credit records, we examine BNPL use by race/ethnicity and gender and explore how it relates to people's financial circumstances. Overall, most BNPL users said they used BNPL for convenience or to spread out payments; yet, 57% used BNPL out of necessity. Liquidity‐and credit‐constrained consumers were among the most likely to use BNPL, and most did so out of necessity. For example, 84% of BNPL users with a credit score under 620 said they used BNPL because it was the only way they could afford their purchase. These findings highlight that while many BNPL users on firm financial footing find it to be a convenient way to make their purchase and spread out their payments, other consumers, and particularly those more financially vulnerable, may be at risk of overextending themselves.

Date: 2025
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