US consumer spending on ‘buy now, pay later’ exceeds $160 billion

Research published by Federal Reserve economists shows that Americans spent more than $160 billion on ‘buy now, pay later’ (BNPL) plans last year. The use of ‘pay-in-four’ plans, which typically involve four installments over six weeks, accounted for approximately half of that total spending and has seen an increase of nearly 80% since 2023.

Experts note that consumers are increasingly utilizing these services for essential everyday expenses, including groceries, utility bills, transportation, and even rent. Financial analysts suggest this shift is driven by a difficult job market, economic pressures, and rising costs of living that have outpaced income growth for many individuals. What was once viewed primarily as a convenience tool is increasingly being used to manage immediate cash flow challenges.