The BNPL Blues: Buy Now, Pay Later Usage Tied To Credit Problems, Study Says

Buy Now, Pay Later schemes are growing in popularity: 74% of consumers have used BNPL at least once and 62% expect to increase their usage in 2022 -- but at some risk, judging by “Buy Now, Pay Later is surging but many consumers overextend their credit,” a study released this week by financial services firm Breeze, which focuses on income protection.

Of the shoppers polled, 45% began using BNPL because of a poor credit history -- and usually not being eligible for a credit card, a figure that rises to 57% among those with multiple accounts, and 57% say BNPL has caused then to spend above their means. 

Marketers should keep this in mind when crafting emails to move customers to BNPL. 

Of those driven by poor credit, 57% have multiple BNPL accounts open at once. And 69% of those with multiple accounts open admit they are spending beyond their means. 

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Overall, 41% of consumers have had multiple accounts open at the same time. But 50% of those in the 18-24 age cohort have done this, along with 48% of shoppers ages 35-44.

And 43% of people in the 24-34 demographic have several accounts, as do 32% of those ages 48-54 and 25% who are 54+. 

Of all BNPL users, 36% have missed a payment or made a late payment at least once. But that is also true of 48% with multiple accounts.  

Yet 62% of BNPL users prefer BNPL to credit cards for financing purchases. And 61% say BNPL has reduced their credit card usage. 

Breeze, a financial service for consumers, surveyed 1,500 U.S. consumers in a four-day period starting January 4, 2022. 

 

 

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