Financial Health Network publishes new research that reveals that

Financial Health Network publishes new research that reveals that

Chicago, Illinois, March 24, 2022 (GLOBE NEWSWIRE) — The Financial Health Network, the national authority on financial health, today released results from the first truly nationally representative survey, “Buy Now , Pay Later: Implications for Financial Health,” seeking to understand who is using Buy Now Pay Later (BNPL) and their experiences with the service. The brief data, from FinHealth’s upcoming and highly anticipated annual spending report, revealed that around one in four BNPL users are financially vulnerable, meaning they are struggling with most or all aspects of their financial life, and of these users, almost a quarter report having difficulty making payments. Almost half (47%) said they would not have made a purchase or spent more than they otherwise would have BNPL was not available.This includes more than a third (34%) users who would not have t not made the purchase if BNPL had not been available. At the same time, 92% of users said they had no difficulty making payments and 99% said they understood the product’s terms and conditions.

As a point-of-sale loan, BNPL is considered by some to be a technology-friendly alternative to credit cards or a modern variant of layaway financing that allows consumers to pay for online or in-store purchases over a set period of time. (usually four payments over six weeks). There are many types of plans using the BNPL label, ranging from plans that split payments into four installments with no interest charges (“pay in four”) to longer installment loans.

Key findings include:

  • 10% of households report having used BNPL in the 12 months to November 2021, a significant deviation from other published estimates. Of these, 70% say they use a short-term, interest-free BNPL plan.
  • Younger and less financially healthy households are more likely to use BNPL. Financially vulnerable households, as measured using the Financial Health Network’s innovative FinHealth Score(R), are nearly four times more likely to use BNPL than financially healthy households (18% vs. 5%). In fact, almost a quarter (24%) of BNPL users are financially vulnerable.
  • Despite the recent emergence of BNPL in the US, nearly half (46%) of users had used BNPL three or more times in the previous 12 months, as of November 2021.
  • Almost half (47%) said they would not have made a purchase or spent more than they otherwise would have if BNPL had not been available. This includes over a third (34%) of users who would not have made the purchase had BNPL not been available.
  • While few users overall (8%) report difficulties making payments, almost a quarter (24%) of financially vulnerable BNPL users report difficulties.
  • Total US consumer spending on BNPL interest and fees in 2021 is estimated to be less than $1 billion, a small fraction of the estimated $95 billion spent on revolving credit card balances.

“Buy now, pay later could be a mixed bag for consumers – on the one hand it offers consumers a convenient and inexpensive way to finance their purchases, but there are customers who use BNPL to make purchases that ‘They wouldn’t do otherwise,’ said Meghan Greene, director of research at the Financial Health Network. “It is still too early to know the full impact of the BNPL on the financial health of consumers, but we are seeing potential warning signs in the number of consumers, particularly those who are already financially vulnerable, who report having difficulty to make their repayments.

Other takeaways include:

  • Over 20% of BNPL users do not have or use a credit card (about as many as non-users).
  • More than 40% report having subprime credit ratings.
  • One in three BNPL users say they would not have purchased if BNPL were not available. Among financially vulnerable BNPL users, more than 60% said they would not have made the purchase without BNPL.
  • Few people struggled to make payments (8%) – a much lower number than other research suggests – but higher for financially vulnerable households (around 25%).
  • In the survey, BNPL short-term users reported owing an average balance of $330.

This note is a Product Spotlight of the upcoming annual FinHealth Spend Report (April 2022), which provides a comprehensive account of the costs consumers pay for financial services and the consumer segments that bear these costs.

About the Financial Health Network

The Financial Health Network is the leading authority on financial health. We are a trusted resource for business leaders, decision makers and innovators united in a mission to improve the financial health of their customers, employees and communities. Through research, advisory services, measurement tools, and cross-industry collaboration opportunities, we advance awareness, understanding, and proven best practices for better financial health for all. To learn more about the Financial Health Network, visit and follow us on Twitter at @FinHealthNet.


Amanda P. Whitten