Buy Now, Pay Later Usage Grows Across United States

Nearly one in five households made repayments exceeding $500 in September 2026 as consumer interest in installment plans rises.

Updated on Oct. 30, 2026 in Spending

Isometric editorial illustration of stacked shipping boxes and crates, representing the systematic use of consumer installment financing in the United States. — Nearly 20% of U.S. households utilizing buy now, pay later services completed a single repayment exceeding $500 in September 2026. AI Illustration. Upload story photo >

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In September 2026, roughly 20% of U.S. households utilizing buy now, pay later services completed a repayment exceeding $500. This usage reflects a broader shift toward installment-based financing for retail and daily expenses.

Why it matters

The majority of users rely on these services to manage cash flow through convenient, spread-out payments. However, the data highlights potential financial strain, as a significant portion of users reported late payments or overdraft fees.

In 2025, six major providers originated $156.7 billion in consumer credit, with 63% of that total carrying no annual percentage rate. Currently, 26% of users report at least one late payment in the preceding year.

The players

Bank of America

This major financial institution reported that 8.3% of its banking customers used buy now, pay later services in September 2026.

Federal Reserve

The central bank of the United States monitors economic conditions and recently published data regarding consumer credit usage trends.

The details

Consumers increasingly use these services to finance clothing, electronics, furniture, and food, often opting for plans that divide costs into four installments over six weeks. While 87% of users choose the service to manage payments, 11% reported incurring overdraft or insufficient-funds fees due to the transactions.

Six major providers originated $156.7 billion in consumer credit during 2025.
The Federal Reserve published research on 2025 usage survey results in August 2026.
One in five households made buy now, pay later repayments exceeding $500 in September 2026.

Market Dynamics

This rise in short-term credit usage marks a departure from traditional disclosure requirements established under the Truth in Lending Act. The shift reflects a growing consumer preference for flexible installment credit over traditional high-interest debt instruments.

Consumers should be aware that 11% of users have faced overdraft fees, making it critical to align installment due dates with incoming cash flow. Investors should monitor how these credit volumes influence the balance sheets of both traditional banks and alternative lenders.

The takeaway

Users should carefully track installment due dates to avoid the common pitfall of overdraft fees linked to automatic withdrawals. Prioritizing these payments within a monthly budget is essential for maintaining liquidity when using installment-based credit models.