Buy Now, Pay Later Users Are Young, Socially Connected Big Spenders
Key Takeaways
More than 1 in 10 U.S. adults (12.6%) have outstanding buy now, pay later debt. These loans help consumers stretch their cash without relying on credit cards with high interest rates.
Young consumers are more likely to be BNPL users: Gen Zers and millennials apply for new loans at higher rates than the general population.
BNPL users’ outsized social media usage, shopping activity and event attendance illustrates their intrinsic desire to live impressive lifestyles, enabled by debt.
Buy now, pay later loans are an attractive option for consumers: These short term loans allow shoppers to extend their cash flow over a defined period, typically for no interest. As credit card interest rates have risen in recent years, BNPL options have become even more attractive. In December 2024, 12.6% of U.S. adults reported having outstanding BNPL debt, per Morning Consult’s economic data. Retailers have made these options widely available to shoppers, and the share of respondents who report using BNPL providers Klarna, Afterpay and Affirm has risen more than 13 percentage points since April of 2020, when Morning Consult began tracking.
About 1 in 10 (10.8%) of U.S. households applied and were approved for a buy now, pay later loans in December 2024, consistent with a 6-month average of 10%. That number rises substantially for Gen Zers (16%) and millennials (15%).
Much like credit cards, BNPL loans can be a helpful tool or a slippery slope to untenable debt. Users of the major U.S. BNPL users tend to be more optimistic about their current and future financial conditions, potentially leading to a willingness to take on more risk. Those who carry BNPL debt are far more likely to take on additional debt, with 60% indicating they took out a new BNPL loan in the last month.
Buy now, pay later users are young, but not low income
A common assumption about BNPL users is that they lean on the service because they don’t have access to credit, or are buying too many things they can’t afford. The demographic profile of those who carry BNPL debt reveals that the chief differentiator of this audience is their age, not their income: Millennials show outsized usage of BNPL loans relative to their population size. Individuals in households earning less than $50,000 annually are underrepresented in the BNPL user profile relative to their share of the total share of respondents.
Buy now, pay later users are young, urban dwelling parents
BNPL users are also more likely to be non-white consumers, parents, and urban dwellers, all of which are consistent with the general profiles of young consumers. Gen Zers and millennials also happen to be big spenders in discretionary categories. Not only are they more open to these more novel lending platforms, but they’re also just more actively shopping in general.
Social media usage influences BNPL users’ shopping and financial habits
Whether they’re watching shopping hauls, financial advice videos or everything in between, BNPL users spend a lot of time on social media. Per Morning Consult Audience data, their usage of the most popular platforms, YouTube and Facebook, edges just ahead of the general population, while their usage of TikTok and Snapchat far exceeds others’.
BNPL users show outsized usage of social media platforms like Instagram and TikTok
This is in part due to their youth, as younger people generally spend more time on social media. It’s also due to the influence of social media on consumer spending. Keeping up with trends is expensive, and BNPL offerings are tempting to spread out payments for that coveted new pair of jeans or a living room makeover.
BNPL users are motivated to keep up with the Joneses
The psychographic profile of BNPL users reveals that they’re a more trend- and status-oriented group. More than half of BNPL users (56%) say they’re always looking out for the latest trends, versus 32% of the general population. They report being among the first to try a new technology product (53% versus 30%), and, crucially, that they like to live a lifestyle that impresses others (37% versus 21%). In short, keeping up with the Joneses is a driving factor in their decision making. Buy now, pay later loans offer a way to stretch their cash flow (typically at a lower interest rate than credit cards) to enable their lifestyle aspirations.
Buy now, pay later users shop more, attend more events, and travel more often than others
BNPL users are living large: they shop more often, attend more concerts, entertainment and sporting events, travel more, are more likely to drink alcohol, and even trade stocks more often than the general population. They’re less likely than average to say they tend to choose the more affordable option, so these small loans help them to spread out payments for their upgraded lifestyles.
If these users can maintain their luxurious lifestyles, meet their payment obligations for their loans, and keep otherwise healthy financial habits, more power to them and the providers that support them. However, their consumption patterns and psychographic profile do indicate a tendency to live beyond their means, which will eventually catch up to them.
