Gen Z’s loyalty remains with credit cards

Splitit, the only white label card installment platform that uses consumer credit, recently conducted a study in partnership with Pymnts, looking at how consumers use buy now, pay later payment plans and how the model has changed over the past six months. consumer behavior. The report, “Redefining Retail: Consumer Finance Trends Driving the Evolution of Installment Plans,” surveyed more than 2,600 people, 51% of whom were female, 34% of whom had a college degree, and the average age are 48 years old and 39% of respondents are female.

65% of Gen Z and Millennial consumers have used an installment plan in the past year. However, nearly 63% of Gen Z shoppers are more loyal to their credit cards than to retailers. Half of consumers said they would switch to another retailer if they offered a card-linked installment plan at checkout.

However, 33% of consumers surveyed said they were unaware that the BNPL scheme was a new loan. The report's authors found that this group of shoppers would switch retailers at checkout and use BNPL installments with their existing credit cards.

40% of respondents said they would choose an installment payment option tied to a credit card, with 33% choosing third-party BNPL services and 30% choosing merchant or store cards.

Installment plans are an attractive option for consumers who want to take a more active role in managing their spending habits. While installment plans have been rejected for discretionary purchases such as dining out, their use for major purchases such as home furnishings and large appliances has been a major player in retail spending trends.

Now, card-linked installment plans using existing bank credit are becoming the preferred option for large purchases – 33% of consumers choose this method, compared with 21% using the traditional four-instalment option.

These findings contrast with traditional BNPL schemes, which are seen as a smarter way to pay for products and services than bank-issued credit cards.

“Young consumers are more loyal to the way they pay than to the brand or retailer they shop from,” said Splitit CEO Nandan Sheth. “Gen Z shoppers are the highest proportion of consumers using pay later plans and the least likely to use them. Concerned about the impact of traditional BNPL schemes on their credit scores, however, while many traditional pay later players caution consumers not to miss a payment, the fact remains that more than a third of shoppers are unaware they are starting a new loan.

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