Bank of America report finds that low-income consumers with high credit card debt are more likely to use installment payment services.
05/17/2024 1:45 P.M.
1 minute read
A new report from Bank of America found that consumer use of buy now, pay later (BNPL) appears to be slowing.
“In March 2024, year-over-year growth in the share of Bank of America customers with a BNPL payment, mostly via a debit or credit card or automated clearing house, rose only half a percentage point compared with a one [percentage point] increase in March 2023 and a nearly two and a half [percentage point] increase in March 2021,” according to the report.
Still, internal Bank of America data shows that the share of households with heavy usage has increased every year since 2022.
Additional findings:
- Debit and credit card retail spending by households with 20 or more BNPL payments per month, which the bank defines as “heavy” usage, has risen 15% since 2019.
- While internal bank data shows that average credit card balances have been increasing from 2021 through March 2024, they’ve been rising faster for medium- and heavy-use BNPL households since mid-2021. Bank of America reports that there appears to be evidence that BNPL users may have a less robust financial position than the average household.
Recent reports indicate that consumers turn to BNPL both out of necessity and convenience. The New York Fed found that BNPL purchases under $250 were among the most common for both financially fragile and finically stable households.
Read these related articles:
- BNPL Popularity Surges—Regulators, Risk Analysts and Lenders Rush to Dissect Usage
- From the Web: Consumers Use BNPL to Spread Out Cash Flow
Remember, subscribe to ACA Daily and Member Alerts under your My ACA profile when logged in to acainternational.org.