Financial Health Network Releases New Research Finding that Financially Vulnerable Consumers Most Likely to Use and Struggle With Repaying Buy Now, Pay Later Loans

Data also shows overwhelming majority of users understand terms and are successfully using the product

Chicago, IL, March 24, 2022 (GLOBE NEWSWIRE) -- The Financial Health Network, the nation’s authority on financial health, today released the results of the first truly nationally representative survey, "Buy Now, Pay Later: Implications for Financial Health,” seeking to understand who uses Buy Now Pay Later (BNPL) and their experiences with the service. The brief data, from the forthcoming annual and highly anticipated FinHealth Spend Report, found that roughly one in four users of BNPL are financially vulnerable, meaning that they are struggling with most or all aspects of their financial lives, and of these users nearly a quarter report struggling to make payments. Almost half (47%) said they would not have made a purchase or spent more than they otherwise would have spent had BNPL not been available. This includes more than a third (34%) of users who would not have made the purchase had BNPL not been available. At the same time, 92% of users reported no difficulty making payments and 99% stated that they understood the terms and conditions of the product. 

As a point-of-sale loan, BNPL is viewed by some as a tech-friendly alternative to credit cards or modern twist on layaway financing that lets consumers pay for online or in-store purchases over a set period (typically four payments over six weeks). There are many types of plans using the BNPL label ranging from plans which divide payments into four installments with no interest charge (“pay in four”) to longer-term installment loans. 

Key findings include:

  • 10% of households report having used BNPL in the 12 months prior to November 2021, a significant deviation from other published estimates.  Of these, 70% report using a short-term, no-interest BNPL plan.
  • Younger and less financially healthy households are more likely to use BNPL. Financially Vulnerable households, as measured using the Financial Health Network’s innovative FinHealth Score(R), are nearly four times more likely to use BNPL than Financially Healthy households (18% vs. 5%).  In fact, almost one-quarter (24%) of BNPL users are Financially Vulnerable.
  • Despite the recent emergence of BNPL in the United States, almost half (46%) of users had used BNPL three or more times in the previous 12 months, as of November 2021.
  • Almost half (47%) said they would not have made a purchase or spent more than they otherwise would have spent had BNPL not been available.  This includes more than a third (34%) of users who would not have made the purchase had BNPL not been available.
  • While few users overall (8%) report difficulty making payments, nearly a quarter (24%) of Financially Vulnerable BNPL users report challenges.
  • Total U.S. consumer spending on interest and fees from BNPL in 2021 is estimated at less than $1 billion, a small fraction of the estimated $95 billion spent on revolving credit card balances. 

“Buy Now Pay Later could be a mixed bag for consumers–on the one hand it provides a convenient and low-cost way for consumers to finance purchases, but there are customers who are using BNPL to make purchases they would not otherwise make,” said Meghan Greene, director of research at  Financial Health Network. “It's still too early to know the full impact of BNPL on the financial health of consumers, but we do see potential warning signs in the number of consumers, particularly those who are already financially vulnerable, who report struggling to make repayments.”

Other takeaways include:

  • Over 20% of BNPL users do not have or do not use credit cards (roughly the same as non-users).
  • More than 40% report having subprime credit scores.
  • One in three users of BNPL report that they would not have made the purchase if BNPL were not available. Among Financially Vulnerable BNPL users, over 60% said they would not have made the purchase without BNPL.
  • Few people struggled to make payments (8%) – a much lower number than suggested by other research – but higher for Financially Vulnerable households (about 25%).
  • In the survey, short-term BNPL users reported owing an average balance of $330.

This brief is a Product Spotlight from the forthcoming annual FinHealth Spend Report (April 2022), which comprehensively reports on the costs consumers are paying for financial services and what segments of consumers bear those costs. 

About the Financial Health Network

The Financial Health Network is the leading authority on financial health. We are a trusted resource for business leaders, policymakers and innovators united in a mission to improve the financial health of their customers, employees and communities. Through research, advisory services, measurement tools, and opportunities for cross-sector collaboration, we advance awareness, understanding and proven best practices in support of improved financial health for all. For more on the Financial Health Network, go to and follow us on Twitter at @FinHealthNet.



BNPL usage by age group

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