Generational Patterns in Buy Now, Pay Later Use, Repayment, and Financial Literacy in the United States

Abstract

Buy Now, Pay Later (BNPL) installment credit has expanded rapidly among U.S. consumers: the six largest pay-in-four providers originated $43.9 billion in loans in 2023, up from $2.2 billion in 2019 (Consumer Financial Protection Bureau 2025a). Adoption concentrates among young adults: consumers aged 18 to 24 financed a purchase with BNPL at nearly twice the overall population's rate in 2022 and carry a disproportionate debt share (Consumer Financial Protection Bureau 2025b). This paper asks whether publicly available U.S. data reveal a consistent generational pattern across BNPL use, repayment difficulty, and financial literacy. Drawing on the Consumer Financial Protection Bureau, the Federal Reserve System, a LendingTree consumer survey, and the TIAA Institute-GFLEC Personal Finance Index, it documents that Generation Z and Millennials report substantially higher BNPL late-payment rates than Generation X (45 percent and 44 percent, respectively, versus 20 percent), while Generation Z separately scores lowest among generations measured on financial literacy. The two patterns only partly line up: Millennials' literacy score sits close to Generation X's even though their late-payment rate sits close to Generation Z's, so the paper treats usage, repayment, and literacy as a joint description rather than a single consistent trend. These statistics come from different samples, years, and instruments not designed to be combined, and the paper is explicit that it observes a cross-generational, cross-sectional association, not an individual-level or causal relationship. It discusses the resulting identification challenges and closes by identifying three areas (credit-bureau reporting, point-of-sale disclosure, and high school instruction on installment credit) that the pattern motivates for further policy evaluation, without claiming the data establish which intervention would work.

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