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Industry NewsB2C

BNPL services gain popularity over credit cards for young consumers

Published

Mar 4, 2025

TopicB2C
Credit: Outlever

TL;DR

  • Millennials and Gen Z increasingly prefer Buy Now, Pay Later services over traditional credit cards, especially during the holiday season.
  • J.D. Power's study finds 42% of younger consumers use BNPL, compared to 21% of older generations.

Author

Paddle News Desk

Card-based BNPL products continue to lead the charge on satisfaction, as issuers are leveraging their existing brand awareness and equity to retain would-be defectors.

Sean Gelles

Sr. Dir of Banking and Payments | J.D. Power

The popularity of Buy Now, Pay Later financial services over traditional credit cards continues to surge, especially among younger consumers and during the holiday season, according to a new study.

Millennials, Gen Z love BNPL: Consumer insights firm J.D. Power's 2025 U.S. Buy Now, Pay Later (BNPL) Satisfaction Study, which polled around 4,300 U.S. consumers, found BNPL usage has increased significantly, particularly among Millennials and Generation Z. Approximately 42% of consumers in these demographics have used BNPL services, compared to just 21% of older generations.

Flexibility appeals: During the 2024 holiday season, Gen Z consumers reported using BNPL services more frequently than traditional credit cards. Key factors driving this adoption include competitive repayment terms, seamless integration at checkout, and cost-efficient alternatives to traditional credit lines. Younger consumers are increasingly drawn to BNPL as a flexible financial tool, particularly for managing short-term expenses.

Big names deliver satisfaction: The study also ranked customer satisfaction among BNPL providers, with card-linked BNPL products from established financial institutions outperforming standalone BNPL services. The top-ranked BNPL provider was Plan It by American Express (with the highest customer satisfaction score of 706), followed by Chase BNPL, and Citi Flex Pay.

Brand awareness pays off: "The BNPL segment has undoubtedly grown in popularity, with more customers using these services than ever before," said Sean Gelles, senior director of banking and payments at J.D. Power. "Card-based BNPL products continue to lead the charge on satisfaction, as issuers are leveraging their existing brand awareness and equity to retain would-be defectors."