Credit Card Installment Plans Dominate BNPL Services With 3-to-1 Consumer Usage Advantage

When it comes to comparing credit card installment plans with Buy Now, Pay Later services, the competition isn’t even close with installment plans beating out BNPL by a 3-to-1 margin.

Thirty-one percent of surveyed consumers reported they used credit card installment plans in the past three months, according to PYMNTS Intelligence research in January 2026. But only 12% of consumers reported using BNPL services in that same time period.

And more good news for card issuers is that 7 in 10 consumers made at least one purchase using a general-purpose credit card. 

The appeal of credit card installment plans reaches across all generations with even younger consumers using installment plans on their credit cards. More than 4 in 10 Gen Z consumers say they are using credit card installment plans, and millennials report using these installment plans in a similar pattern, PYMNTS reports.  

It appears BNPL is not disrupting traditional credit after all, and credit card installment plans are a more popular payment choice for consumers looking to manage their cash flow. It turns out consumers want a way to extend payments within their existing credit relationships, namely the credit cards they already carry in their wallets. 

Older members of Gen Z are in their 30s, and they may be juggling car payments, mortgage payments, and the expense of raising children. They are looking for ways to manage cash flow and extend payments. And they are not turning to BNPL to do it. 

Instead, they are sticking to the credit relationships they already know, including installment plans on their favorite store cards. These private-label installment plans have grown at a compound rate of 4.8% over the past two years. 

Credit card issuers report on-time payments to the three major credit bureaus, and this includes payments made on installment plans.

A good payment history leads to good credit scores, which leads to lower interest rates on auto loans, mortgages, and personal loans. Consumers get lower interest rates and lenders get more creditworthy borrowers, a win for everybody. 

Every on-time payment is a credit-building opportunity on a credit card. In contrast, BNPL providers such as Klarna and Afterpay don’t report consumer financial information to the credit bureaus, according to EMarketer. So all the good, on-time payments made with these companies won’t help a consumer’s credit score one bit.

The monthly fee credit card installment plans charge is not deterring customers. Here are examples from Chase, American Express, and U.S. Bank of fees on credit card installment plans.

The Chase Pay Over Time monthly fee for plans set up after purchase is equal to 1.72% of the purchase amount. This fee remains the same throughout the length of the installment plan until the balance is paid in full. There is no credit check or application, and consumers earn the same rewards as they would on credit card purchases.

Like Chase, American Express allows card members to pay for purchases in equal monthly installments with a fixed monthly fee. The amount of the fee is not disclosed in the terms and conditions section of the American Express website. American Express card members earn rewards as they would when making purchases with their American Express cards.  

According to the U.S. Bank website, the monthly fee for its Extend Pay would be determined based on the installment plan’s original principal amount, a consumer’s purchase APR, and additional factors. U.S. Bank customers using installment plans earn the same rewards as they would using U.S. Bank credit cards.

When it comes to the competition between credit card installment plans and BNPL services, credit card installment plans are the clear favorite.

These plans are more popular than BNPL by a 3-to-1 margin. Younger consumers like using installment plans from credit card companies. More than 4 in 10 Gen Z consumers report using credit card installments. 

Credit card installment plans allow consumers to earn rewards as they would if they were making credit card purchases. And since credit card issuers report to the credit bureaus, each on-time payment on an installment plan will be reported helping to build up a customer’s credit rating.