CONSUMER FINANCIAL PROTECTION BUREAU | JANUARY 2025

Consumer Use of Buy

Now, Pay Later and Other
Unsecured Debt
Table of Contents
Table of Contents ........................................................................................................ 1

I. Executive Summary.............................................................................................. 2

II. Introduction ........................................................................................................... 4

III. Data and Sample ................................................................................................... 8

IV. BNPL Aggregate Trends .................................................................................... 11

V. Loan Stacking and Borrowing Persistence ...................................................... 17

VI. Total Unsecured Consumer Debt Burden ........................................................ 22

Conclusion................................................................................................................. 29

Appendix A: Additional Tables and Figures ....................................................... 30

1 CONSUMER FINANCIAL PROTECTION BUREAU

I. Executive Summary
Buy Now, Pay Later (BNPL) loans, generally defined as zero-interest loans repaid in four or
fewer installments (“pay-in-four” loans), have grown rapidly in the United States (U.S.) since
2019. Lenders have typically not reported BNPL loans to the nationwide consumer reporting
companies. As a result, the loans have not appeared in credit records in large enough volumes
for external observers to measure key statistics relevant to consumers in this market, including
overall persistence in use, loan stacking across firms and total unsecured consumer debt
balances. This study overcomes this data gap by using a matched sample of BNPL applications
and originations for pay-in-four loans from six large BNPL firms (Affirm, Afterpay, Klarna,
PayPal, Sezzle, and Zip) with their corresponding de-identified credit records.

Based on these data from the six firms listed above, the analysis found that:

 Twenty-one percent of consumers with a credit record financed at least one

purchase using BNPL from at least one of the six firms in 2022. Approximately
20 percent of these borrowers can be characterized as heavy users, originating more than
one BNPL loan on average per month in 2022, up from 18 percent in 2021.

 In 2022, consumers took out more BNPL loans on average than in 2021,
with the majority taking out multiple BNPL loans at the same time. The
average number of annual originations per borrower increased from 8.5 in 2021 to 9.5 in
2022. In 2022, approximately 63 percent of borrowers originated multiple simultaneous
loans at some point during the year, and 33 percent did so across multiple firms. The
majority of BNPL loans originated during this time period did not appear in credit
records.

 From 2020-2022, credit approval rates for BNPL loans increased, in part
due to the increased use of counteroffers. In some instances, rather than
declining the application outright, BNPL lenders have begun making applicants a
counteroffer. Counteroffers may include, for example, a downpayment above the typical
25 percent, or a lower amount of credit offered. Across all credit score categories,
including consumers without a FICO score, the six lenders approved an average 67
percent of applications in 2020, 78 percent in 2021 and 79 percent in 2022. Among
applicants with subprime or deep subprime credit scores, BNPL lenders approved 78
percent (including counteroffers) in 2022.

2 CONSUMER FINANCIAL PROTECTION BUREAU

  Borrowers with subprime or deep subprime credit scores make up the
majority of BNPL originations. From 2021 to 2022, borrowers with deep subprime
credit scores accounted for 45% of BNPL originations, while those with subprime credit
scores were responsible for another 16% of originations.

 BNPL default rates remain lower than credit cards, likely due to automatic
repayment requirements. On average, between 2019-2022, BNPL borrowers
defaulted on 2 percent of their BNPL loans. In comparison, BNPL borrowers defaulted
on 10 percent of the credit cards they held during the same time period. Differences in
default rates between BNPL and credit cards may be the result of structural differences
in how repayments are set up with the two different products. For example, most BNPL
firms require customers to set up automatic repayments via their debit card, credit card,
or checking account.

 Consumers with at least one BNPL loan in a given month were more likely to
hold higher balances on other types of unsecured consumer credit. Those
consumers held higher balances in personal loans ($453 more), retail loans ($292 more),
student loans ($5,734 more), credit cards ($871 more), and loans from subprime
alternative financial services lenders ($29 more) compared to consumers of the same age
and credit score category who did not use BNPL. These differences are statistically
significant at a 99 percent level of confidence.

 Compared to older age groups, BNPL purchases of borrowers aged 18-24

composed a higher percent of their total unsecured debt in the months in
which they borrowed in 2022. Among this age group, BNPL purchases made up 28
percent of total unsecured consumer debt, compared to an average of 17 percent among
borrowers of all age groups, during the months in which they borrowed.

 Prior to first-time BNPL use, average credit card utilization rates increased,
suggesting that lower credit card liquidity may encourage consumers to
finance purchases with BNPL. In addition to the trend in the credit card utilization
rate, the average utilization rate among BNPL borrowers remains notably high, between
60 and 66 percent. In contrast, the average credit card utilization rate for consumers
never observed using BNPL was 34 percent.

3 CONSUMER FINANCIAL PROTECTION BUREAU

II. Introduction
Buy Now, Pay Later (BNPL) loans, generally defined as zero-interest loans repaid in four or
fewer installments (“pay-in-four” loans), have grown rapidly in the United States (U.S.) since
2019. 1 Because BNPL lenders generally do not furnish loan performance information to the
three Nationwide Consumer Reporting Companies (NCRC), 2 it has not been possible to use
administrative records to estimate BNPL prevalence, persistence in use, and loan stacking
across firms (defined as having two or more concurrent outstanding BNPL loans at different
lenders). This study fills that gap.

Several surveys have attempted to identify the share of U.S. consumers that borrowed with
BNPL loans within the previous year, spanning a wide range of estimates. 3 Many of these

* This report was authored by Cortnie Shupe and Joshua DeLuca (CFPB Office of Research).
1 For a thorough description of the pay-in-four product and market trends from 2019-2021, See Martin
Kleinbard, Jack Sollows and Laura Udis, “Buy Now, Pay Later: Market Trends and Consumer Impacts,”
Consumer Financial Protection Bureau, September 2022, available at
https://files.consumerfinance.gov/f/documents/cfpb_buy-now-pay-later-market-trends-consumer-
impacts_report_2022-09.pdf, hereinafter Kleinbard et al. 2022 (last visited December 3, 2024). The
pay-in-four product typically requires a 25 percent downpayment, with the following three payments
equally divided into three installments every two weeks. The loan amount is equal to 75 percent of the
purchase, with the last payment due six weeks from the purchase date. Downpayment and installment
amounts may vary, for example, in the event of an application approval that follows a counteroffer from
the lender. We discuss these in detail in Section IV.
2 These companies include Equifax, Experian and TransUnion.
3 In an earlier study, the CFPB Office of Research estimated that 17 percent of consumers with a credit
record borrowed using BNPL at least once between February 2021 and February 2022. See Cortnie
Shupe, Greta Li and Scott Fulford, Consumer Use of Buy Now, Pay Later, available at
https://www.philadelphiafed.org/-/media/frbp/assets/consumer-finance/discussion-papers/dp22-
02.pdf (last visited December 3, 2024). In one of the first surveys on this topic the Federal Reserve Bank
of Philadelphia estimated usage rates in the previous 12 months in 2021 to be 31 percent, although they
reported that respondents appeared to report traditional installment loans in addition to the pay-in-four
product. A follow-up study that attempted to focus on the pay-in-four product found a usage rate close
to 18 percent in the fourth quarter of 2022. See Tom Akana and Valeria Zeballos Doubinko, 4-in-6
Payment Products – Buy Now, Pay Later: Insights from New Survey Data, Federal Reserve Bank of
Philadelphia, February 2024, available at https://www.philadelphiafed.org/-
/media/frbp/assets/consumer-finance/reports/bnpl-survey-insights.pdf (last visited December 3,
2024). The New York Fed estimated a 19 percent usage rate between June 2022 and June 2023. See
Felix Aidala, Daniel Mangrum, and Wilbert van der Klaauw, Who Uses Buy Now, Pay Later, September
2023, available at https://libertystreeteconomics.newyorkfed.org/2023/09/who-uses-buy-now-pay-
later/ (last visited December 3, 2024). The Federal Reserve Bank of Boston estimated that nine percent
of consumers used the product in the 30 days prior to being surveyed in fall 2023. See Joanna Stavins,
Buy Now, Pay Later: Who Uses It and Why, the Federal Reserve Bank of Boston, available at
https://www.bostonfed.org/publications/current-policy-perspectives/2024/buy-now-pay-later-who-

4 CONSUMER FINANCIAL PROTECTION BUREAU

surveys have acknowledged the difficulty respondents often have in distinguishing pay-in-four
loans from traditional point-of-sale (POS) installment loans, which typically finance larger
purchases with interest, yet are often marketed as BNPL. 4 Moreover, in addition to the pay-in-
four product, some BNPL lenders also offer typical POS installment loans, making it even more
difficult for survey respondents and researchers to distinguish between the two types of
products using survey methods. This challenge also exists for researchers using transaction data
from data aggregators, as it is not possible to confidently determine by firm name whether a
transaction is a pay-in-four transaction or a traditional installment. This report aims to provide
general descriptive statistics that are representative of the typical pay-in-four BNPL product.

As part of its efforts to monitor the BNPL market, the Consumer Financial Protection Bureau
(CFPB) utilized its authority under section 1022(c)(4)(B)(ii) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act to obtain a representative sample of de-identified
application- and loan-level data from six large BNPL lenders. Each firm selected a subsample of
records based on day of birth in order to ensure a random sample that would cover the same
group of consumers across firms. The request was limited to the pay-in-four product, which
companies can easily parse out in their data, as they generally treat it as a separate business
model from traditional POS installment loans. Lenders participating in the market monitoring
orders were Affirm, Afterpay, Klarna, PayPal, Sezzle and Zip.

We used probabilistic matching to link consumers’ de-identified BNPL loans across firms and
with their corresponding credit records obtained from one of the NCRCs. This matched dataset
enables a more complete view of consumers’ unsecured debt obligations and allows us to
produce statistics that are representative of the average adult in the U.S. with a credit record.

We find that 21 percent of consumers with a credit record financed at least one purchase at one
of the six firms using BNPL in 2022, the most recent year of data. In this same year, the average
(median) purchase amount was $142 ($108). We characterize approximately 20 percent of

uses-it-why.aspx (last visited December 4, 2024). Finally, the FDIC estimated that roughly 4 percent of
all households had used the product in 2023. See FDIC, “2023 FDIC National Survey of Unbanked and
Underbanked Households,” available at https://www.fdic.gov/household-survey/2023-fdic-national-
survey-unbanked-and-underbanked-households-report (last visited December 3, 2024).
4 See Shupe et al. 2023; Akana and Doubinko 2024; and Akana 2022. In contrast to the BNPL pay-in-four
product, traditional installment loans are structured to be repaid in more than four installments and/or
are structured to charge interest or a finance fee. These loans tend to be for larger purchase amounts
than a BNPL loan and lenders often furnish originations and payment history to credit bureaus and
make hard inquiries into the applicant’s credit file during the underwriting process. In contrast, the
BNPL underwriting process generally involves only a soft inquiry. For more information on the
difference between hard and soft inquiries, see CFPB, “What’s a credit inquiry?” (September 4, 2020),
available at https://www.consumerfinance.gov/ask-cfpb/whats-a-credit-inquiry-en-1317/ (last visited
December 9, 2024).

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borrowers as heavy users, originating more than one BNPL loan on average per month in 2022,
up from 18 percent in 2021.

BNPL loan approval rates increased during the time period studied, in part due to the increased
use of counteroffers. 5 Between 2020 and 2022, lenders increased approval rates for consumers
with subprime and deep subprime credit scores as well as for consumers without a FICO score
in the month in which they applied. Consumers with subprime or deep subprime scores were
responsible for nearly two-thirds of BNPL originations. While loans originated to consumers in
these score categories had higher default rates than those for consumers with higher FICO
scores, BNPL borrowers classified as deep subprime and those without a FICO score still repaid
their loans 96 percent of the time. 6 Broken down by year and age group, BNPL default rates
remained well below those of credit cards among the BNPL borrower population. 7

Many BNPL borrowers originate several loans simultaneously, a practice that is particularly
pronounced during the holidays, when BNPL use tends to spike. We find that approximately 63
percent of borrowers originated multiple simultaneous loans at any firm at some point during
the year, in 2021 and 2022, with 32 percent taking out BNPL loans across different firms in
2021 and 33 percent taking out BNPL loans across multiple firms in 2022. Because lenders do
not generally furnish loan originations and performance information to credit bureaus, these
loans remain unobserved in credit records.

By matching BNPL loans to credit records, we show that BNPL borrowers are more likely to
have open balances in all types of non-BNPL unsecured credit products examined, including
credit cards, personal loans, retail loans, student loans and other types of alternative financial
services (AFS), such as payday and installment loans. 8 Moreover, they hold higher amounts of

5 Counteroffers may include a higher downpayment or approval for a lower amount of credit.
6 As noted earlier, most BNPL firms require customers to set up automatic repayments via their credit
card, debit card, or checking account.
7 In May 2024, the CFPB issued an interpretative rule that clarified that Buy Now, Pay Later lenders are
“credit cards” under Regulation Z. Throughout this report, the term “credit cards” is used to refer to
conventional credit cards. See CFPB, “Use of Digital User Accounts to Access Buy Now, Pay Later Loans”
(May 22, 2024), available at https://www.consumerfinance.gov/rules-policy/notice-opportunities-
comment/open-notices/use-of-digital-user-accounts-to-access-buy-now-pay-later-loans/ (last visited
January 8, 2025).
8 We define other alternative financial services as all non-traditional loans in the consumer’s alternative
credit bureau records. This alternative credit bureau is owned by the NCRC from which we obtained the
traditional credit records and it collects and provides information on trades and inquiries from sub-
prime lenders. Non-traditional loans include those from single-payment micro loans (SPML, or
traditional payday loans), installment loans, rent-to-own agreements, auto title and other unclassified
non-traditional industries. Among these industries, only SPML and installment loan trades are
identifiable in the alternative credit bureau data as a separate category.

6 CONSUMER FINANCIAL PROTECTION BUREAU

these types of debt compared to non-BNPL users, even controlling for age, credit score and
seasonal variation in BNPL use.

Finally, this report shows that credit card utilization rates increase steadily in the year prior to
consumers’ first-time BNPL use, suggesting that decreasing credit availability could be one
factor motivating BNPL use. Indeed, between 2020 and 2023, the average credit card utilization
rate among BNPL borrowers remains notably high, between 60 and 66 percent.

7 CONSUMER FINANCIAL PROTECTION BUREAU

III. Data and Sample
The analysis in this report is based on two datasets. The first dataset includes an approximately
16 percent random sample, based on day of birth, of all BNPL applications from six large BNPL
firms from the time these firms began originating BNPL loans in the United States through the
end of 2022. One firm began extending loans in 2017, three firms began lending in 2019, and
two firms began in 2020. The dataset contains approximately 145 million BNPL applications
from 2017 through 2022. This sample is generally representative of the typical BNPL applicant,
and the subset of applicants that took out a loan is generally representative of the typical BNPL
borrower. We refer to this dataset as the raw, or unmatched sample, and we use it to
characterize the macroeconomic significance of this market and analyze general transaction-
level trends.

In 2022, the most recent year of available data, Table 1 shows that the dataset contains
approximately 66 million BNPL loan applications, of which approximately 69 percent resulted
in originations. Scaling to account for the size of the sample, the data represent approximately
277 million BNPL loans with a gross merchandise value of roughly $34 billion at the six BNPL
lenders combined. To place this number in context, it represents approximately one percent of
total spending on credit cards in the same year. 9

TABLE 1: BNPL MACROECONOMIC STATISTICS, 2022

Raw sample observations Scaled aggregate statistics

Number of loan applications 66.1 million 401.9 million
Number of originated loans 45.6 million 277.3 million
Gross merchandise value $5.6 billion $33.8 billion

Note: The scaled macroeconomic statistics are the result of multiplying column 1 by 73/12 to account for the sample
size.

In the unmatched sample of all originations from all six firms, the typical BNPL loan in 2022
was under $100 (inflation-adjusted to September 2024 dollars). Figure 1 shows this
distribution, omitting loans above the 99th percentile of gross origination amounts for exhibition
purposes. The mean transaction amount in this sample was $131.

9 See CFPB, The Consumer Credit Card Market, October 2023, available at
https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-card-market-report_2023.pdf
(last visited October 15, 2024).

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FIGURE 1: DISTRIBUTION OF GROSS TRANSACTION AMOUNTS FOR ALL ORIGINATIONS IN 2022

Note: Approximately 45.6 million observations. Gross transaction amounts have been CPI adjusted to September
2024 prices.

The second dataset used in this report is composed of a subsample of the CFPB’s Consumer
Credit Information Panel (CCIP) that contains consumers’ non-BNPL loan obligations, credit
scores and other credit record information sourced from one of the three nationwide credit
reporting companies. This subsample of the CCIP is based on the same five days of birth (in any
month) as the raw sample of BNPL applications above to ensure that the BNPL records could be
matched to the CCIP subsample. Beginning with this approximately 16 percent random sample
of the CCIP, we further restrict the sample to consumers born between 1953 and 2006 (age 18-
70 at any time between 2018-2023). 10 The final sample contains an unbalanced panel of
approximately 520,000 consumers in each year of observation. The CCIP subsample serves as
the master dataset with which BNPL loans are merged, and we retain all CCIP records in the
subsample, including consumers with and without a BNPL loan match. Consequently, the CCIP
matched sample is representative of the U.S. adult population born between 1953 and 2006 with
a credit record. We link the de-identified BNPL loans to the de-identified credit records in order

10 Approximately five percent of the credit bureau records is missing date of birth information and is
omitted from the matched dataset.

9 CONSUMER FINANCIAL PROTECTION BUREAU

to generate statistics that are representative of the average consumer with a credit record, and to
better understand how consumer finances of BNPL borrowers compare to the average consumer
with a credit record. We also use this sample to determine the degree of BNPL loan stacking
across firms and to analyze BNPL borrowers’ non-BNPL financial obligations. 11

Because the BNPL applications represent the same approximately 16 percent random subsample
as the CCIP dataset described in the previous paragraph, and because the CCIP is a two percent
random sample of U.S. adult consumers with a credit record, the expected match between the
two datasets is approximately two percent. By assuming a two percent match between the BNPL
applicants and the CCIP, we are able to scale the observed share of consumers who borrowed
using BNPL to a population average for consumers of the given age range with a credit record.
Table 2 shows the BNPL adoption rate: roughly 21 percent of consumers with a credit record
borrowed using BNPL from at least one of the six firms at least one time during 2022. The share
increased from about 18 percent in 2021. In both years, the average transaction amount was
around $140, slightly higher than in the unmatched sample.

TABLE 2: BNPL USE 2021-2022

2021 2022
Percent who borrowed with BNPL 17.6% 21.2%
Average transaction amount ($) 141 142
Median transaction amount ($) 110 108
Number of unique consumer observations 519,325 524,773
Note: To calculate the share of consumers, we assume a two percent match rate between the unique consumers in
each firm’s file and the CCIP, as the CCIP represents a random two percent sample of consumers with a credit record.
This number adjusts for the match rate between the firm data and CCIP. Dollar amounts have been CPI adjusted to
September 2024.

11 Loan stacking refers to the practice of taking out multiple BNPL loans simultaneously or taking out
BNPL loans with multiple lenders simultaneously. It was identified in a previous CFPB report as an area
of potential risk for consumer finances. See Kleinbard et al. 2022.

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IV. BNPL Aggregate Trends
In recent years, online and brick-and-mortar merchants have increasingly partnered with BNPL
lenders to offer BNPL products to their customers as a method of payment at checkout. This
proliferation has greatly increased consumers’ awareness of BNPL, with one survey finding that
the percentage of American consumers who had heard of BNPL increased from 56 percent to 73
percent between 2021 and 2022 alone. 12

Figure 2 below shows the trajectory of BNPL applications and credit approval rates at the six
lenders surveyed. In 2019 consumers averaged just over 100,000 daily applications (dark green
line). By 2022, consumers applied for an average of well over 1 million loans each day. As is the
case with many unsecured credit products, demand for BNPL increases sharply during the
holiday season, with spikes in BNPL applications at the end of November and early December of
each of the four years studied, in particular on Black Friday.

In addition to the increase in the number of applications, BNPL lenders also increased the share
of applications that they approved (light green line) from 56 percent of applications in 2019 to
79 percent in 2022. 13 One reason for the increase in the approval rate between 2019 and 2022 is
that lenders often use their customers’ past repayment history to underwrite or supplement
their underwriting strategy. As BNPL use expands, a larger share of applicants consists of
returning customers, for whom the lender does not rely solely on credit information from one of
the three NCRCs.

Stavins, Joanna. 2024. “Buy Now, Pay Later: Who Uses It and Why.” Federal Reserve Bank of Boston
12

Current Policy Perspectives No. 24-3.

13 On average, the six lenders approved 67 percent of applications in 2020 and 78 percent in 2021.

11 CONSUMER FINANCIAL PROTECTION BUREAU

FIGURE 2: DAILY APPLICATIONS AND APPROVAL RATES

Note: Data sourced from the 16% sample of BNPL applications from six large BNPL firms. It has been CPI-adjusted
and scaled to reflect the sample size. Applications and approvals are counted on the day of origination. The approval
rate includes loans that are originated after counteroffers.

A second reason for the increase in BNPL origination rates is that BNPL lenders increased their
use of counteroffers from 2020 to 2022. In most cases the consumer selects BNPL as the
payment option during checkout while shopping online, and the BNPL provider either approves
or declines the consumer for the requested loan amount. In recent years, however, BNPL
lenders have begun making some applicants a counteroffer rather than declining the application
outright. 14 For instance, BNPL lenders may offer prospective borrowers loans that differ slightly
from what they initially requested. These counteroffers may include, for example, a larger
downpayment above the typical 25 percent, or a lower amount of credit approved for the given
purchase, requiring the consumer to reduce the merchandise value in their shopping cart before
proceeding. Figure 3 depicts approval rates by credit score category, excluding and including
counteroffers for applicants in 2020 compared to 2022.

14 Counteroffers often occur in consumer lending outside of the BNPL market. For example, for
counteroffers in the context of mortgage markets see Endre J. Reite, “Information Asymmetry between
Banks, Rent Extraction, and Switching in Mortgage Lending,” Finance Research Letters, 50 (2022):
103339, available at https://doi.org/10.1016/j.jempfin.2023.101431 and Steven Ongena, Florentina
Paraschiv and Endre J. Reite, “Counteroffers and Price Discrimination in Mortgage Lending,” Journal
of Empirical Finance 74 (2023): 101431.

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In 2020, BNPL lenders’ use of counteroffers was limited; across borrowers in each FICO score
category, the approval rate only increased about one percentage point when including
counteroffers as approvals compared to considering counteroffers as rejections. By 2022,
however, BNPL lenders began increasingly leveraging counteroffers to approve more consumers
across every score category. The overall approval rate in 2022 is approximately 8 percentage
points higher when counting counteroffers as approved applications.

FIGURE 3: PERCENT OF CONSUMERS IN EACH SCORE CATEGORY APPROVED FOR BNPL LOAN, 2020
VS. 2022

Note: CCIP sample of applications in 2020 juxtaposed to the CCIP sample of applications in 2022. FICO score
categories are defined as 300-579 for deep subprime, 580-619 for subprime, 620-659 for near prime, 660-719 for
prime, and 720-850 for super-prime. 15 This figure requires a match between the BNPL applications and the CCIP in
order to harmonize the scores used by different lenders.

On average in 2022, BNPL lenders approved 78 percent (including counteroffers) of

applications from consumers with subprime or deep subprime credit scores. 16 Moreover, while

15 We define categories in line with myFICO, the official consumer division of FICO, available at
https://www.myfico.com/credit-education/blog/prime-vs-subprime-loans (last visited December 16,
2024). Lenders may use different score ranges for these classifications.
16 This statistic is calculated as the share of applications from consumers with subprime or deep subprime
FICO scores that were approved.

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all six BNPL firms included in this report conducted soft pulls of consumers’ credit records as
part of the credit underwriting process, firms still approved 62 percent of consumers without a
FICO score without counteroffers in 2022. 17

Indeed, a third factor contributing to the growth in BNPL originations is the willingness of
lenders to approve loans to consumers with low FICO scores and without FICO scores. Table 3
shows that from 2021 to 2022, consumers with deep subprime and subprime FICO scores
accounted for over sixty percent of all originated BNPL loans. Borrowers without a FICO score
accounted for approximately 4 percent of originated loans across 2021 and 2022. 18

TABLE 3: ORIGINATIONS AND DEFAULTS BY CREDIT SCORE CATEGORY, 2021-2022

Score Categories Share of Originations Default Rate

No Score 3.9% 4.1%
Deep Subprime 45.0% 3.5%
Subprime 16.0% 1.1%
Near Prime 12.7% 0.8%
Prime 13.2% 0.7%
Super-prime 9.1% 0.8%
Observations 892,668
Note: FICO score categories are defined as 300-579 for deep subprime, 580-619 for subprime, 620-659 for near
prime, 660-719 for prime, and 720-850 for super-prime. These statistics require a match between the BNPL
applications and the CCIP in order to harmonize the scores used by different lenders. The default rate is calculated as
the share of originated loans by borrowers in each score category that were defaulted.

While consumers with no FICO scores and those rated as deep subprime exhibited higher
default rates on loans originated in 2021-2022 compared to consumers with higher FICO scores,
they still repaid their BNPL loans 96 percent of the time. 19

Growth in both the number of applications and in the share of approved applications
corresponds with increases in cumulative transaction volumes. Figure 4 depicts daily gross

17 Some firms use other credit scoring models such as VantageScore or eBureau scores as part of their
underwriting processes. Firms may also request additional information from consumers prior to
approving them for loans. We use the FICO score from the CCIP to create a harmonized measure of
creditworthiness across borrowers of different BNPL lenders.
18 A separate analysis reveals that borrowers without a FICO score accounted for 4 percent of originations
in just 2022.
19 The data do not contain information on late payments. Defaults are defined as not repaying within 120
days past the due date, when lenders denote the payment as charged off. As noted earlier, most BNPL
firms require customers to set up automatic repayments via their credit card, debit card, or checking
account.

14 CONSUMER FINANCIAL PROTECTION BUREAU

merchandise value from January 1, 2019 through December 31, 2022. In 2019, consumers
purchased less than $7 million in gross merchandise value each day, on average, using BNPL; by
2022, consumers purchased merchandise worth nearly $100 million on average each day using
BNPL. BNPL spending is highly seasonal, with marked increases during the holiday season. For
example, consumers borrowed an average of nearly $150 million each day from Black Friday to
Christmas Eve in 2022, well above the average spent during the rest of the year.

In addition to spending more during the holiday season, consumers were also more likely to
default on their BNPL loans originated during this period. However, across the three holiday
seasons that we observe, this relationship between holiday season borrowing and defaults has
become less pronounced over time. This decoupling could partially reflect BNPL lenders’
targeted tightening of their underwriting criteria in some segments or for some merchants
during this period, or a change in borrower composition over time, or a combination of other
factors. Overall, even with the increase in defaults during the holiday season, default rates on
BNPL loans are lower than default rates on credit cards, discussed further below in Section V. In
2022, consumers defaulted on just 1.2 percent of the money that they borrowed via BNPL. 20

20This statistic is calculated as the share of the gross transaction amount that was charged off because it
was more than 120 days past due. As noted earlier, most BNPL firms require customers to set up
automatic repayments via their credit card, debit card, or checking account.

15 CONSUMER FINANCIAL PROTECTION BUREAU

FIGURE 4: GROSS DAILY TRANSACTION AND CORRESPONDING DEFAULT AMOUNTS

Note: Data sourced from the raw, unmatched sample of BNPL applications from six large BNPL firms. It has been
CPI-adjusted and scaled to reflect the size of the sample. Transaction amounts and defaulted amounts are measured
on the day of origination. Defaults are defined as at least 120 days past due such that defaults are for loans originated
at the end of 2022 are not observed. The figure shows default rates according to the date of loan origination. Because
charge-offs may not be present in the dataset in the second half of 2022 if disputes were ongoing when firms sent
their data, we conservatively cut off the date at which the Figure shows defaults. Generally, 120 days past due are
counted from the first delinquency, which would be up to 120 days and six weeks after origination. However, firms
exercise discretion with customers and may not record outstanding loans as charged off by this date.

16 CONSUMER FINANCIAL PROTECTION BUREAU

V. Loan Stacking and
Borrowing Persistence
Unlike the lenders of other unsecured credit products, like credit cards, BNPL lenders do not
typically report consumers’ BNPL obligations and general repayment history to the three
NCRCs. 21 As a result, other creditors have little to no visibility into consumers’ historical or
outstanding BNPL obligations when underwriting loans. As the prevalence of BNPL has grown,
some lenders and market observers have raised concerns that traditional measures of household
debt may be systematically undercounting consumers’ total unsecured debt obligations. 22 By
linking consumers’ de-identified BNPL loans to their credit records, we are able to identify the
extent to which consumers originate BNPL loans across different firms, as well as how BNPL fits
in with the rest of their unsecured debt portfolio.

BNPL borrowers in the CCIP matched data often have more than one active BNPL loan at any
given time, as around 63 percent of BNPL borrowers had simultaneous loans (from any BNPL
lender(s)) at some point during 2021 and 2022. However, many BNPL borrowers do not appear
to be users of just one preferred provider, but rather open to borrowing with multiple different
lenders, likely a reflection of many factors. For any given purchase, consumers typically choose
from only a limited subset of all BNPL lenders at checkout based, in part, on merchant
partnerships. 23 A large degree of homogeneity across BNPL services may also play a role.
Finally, consumers may take out loans from multiple BNPL lenders because they want more
credit than a single lender will provide. Table 4 shows that, indeed, across 2021 and 2022,
approximately 32 percent of BNPL borrowers had simultaneous, active BNPL loans with at least
two BNPL different firms. 24 While non-BNPL lenders generally cannot observe any of the BNPL

21 While some BNPL lenders have begun to report traditional POS installment loans with longer terms and
larger loan amounts, they generally do not report the traditional pay-in-four BNPL loans. Other
products that generally do not furnish consumer debt obligations to NCRCs include paycheck advance
products as well as some rent and utility payments.
22 See Jessica Dickler, “Could your buy now, pay later loans affect your credit score? Here’s what you need
to know,” CNBC, May 10, 2024, available at: https://www.cnbc.com/2024/05/10/how-buy-now-pay-
later-loans-could-affect-your-credit-score.html.
23 Some BNPL lenders provide single-use virtual cards that their customers can use at non-merchant
partners.
24 Note that this is likely an undercount of the number of consumers with simultaneous loans. One firm,
which is responsible for approximately 19 percent of transactions in the unmatched sample, did not
supply enough information for their loans to be matched to credit records. Therefore, we cannot
quantify the overlap in customers between that firm and the other firms.

17 CONSUMER FINANCIAL PROTECTION BUREAU

loans in credit records, even BNPL firms do not observe loans at other firms, such that loan
stacking across firms presents a particular blind spot.

TABLE 4: BNPL LOAN STACKING

2021 2022
A. Percent of BNPL borrowers
With simultaneous loans at any firm(s) 62.8% 62.7%
With simultaneous loans at different firms 31.7% 32.6%
Observations 42,886 55,675
B. Percent of adult population (with a credit record)
With simultaneous loans at any firm(s) 5.2% 6.6%
With simultaneous loans at different firms 2.6% 3.5%
Observations 519,325 524,773

Note: CCIP matched sample. Panel A is restricted to BNPL borrowers in the sample, defined as having originated at
least one BNPL loan in the given year. Numbers in Panel B are calculated out of the entire CCIP matched sample that
includes BNPL borrowers and non-borrowers. Simultaneous loans are defined as having originated a subsequent
BNPL loan within 42 days of the first, conditional on originating any BNPL loan in the given year. The difference
between the share of consumers with simultaneous loans at different firms and the share with simultaneous loans
overall yields the average share of consumers with simultaneous loans at any given firm.

Just as BNPL originations spike during the holiday season, as shown in Figure 5, holding
multiple BNPL loans at the same time is also more common during the holiday season. In 2021
and 2022, the average number of active BNPL loans per borrower steadily rose throughout the
year before spiking between Black Friday and Christmas Eve, the height of the holiday shopping
season.

Table 5 shows that BNPL borrowers, on average, took slightly more time before originating a
subsequent BNPL loan in 2022 compared to 2021. In 2022, borrowers waited 45 days between
originations, compared to an average of 42 days in 2021. However, both the average and median
number of BNPL originations per consumer increased, from approximately nine in 2021 to
approximately ten in 2022 on average, and from three to four for the median borrower.

18 CONSUMER FINANCIAL PROTECTION BUREAU

FIGURE 5: AVERAGE NUMBER OF ACTIVE BNPL LOANS PER CONSUMER BY DATE, 2021-2022

Note: CCIP matched sample of all originated loans. Simultaneous loans are defined as more than one loan originated
within 42 days of each other. Conditional on having originated at least one loan, this statistic measures the number of
BNPL loans that the average borrower has active on a given day.

TABLE 5: BNPL BORROWER STATISTICS

2021 2022
Average number of originations per consumer 8.5 9.5
Median number of originations by consumer 3 4
Average days between originations 42.4 44.8
Median days between originations 27.5 29.3
Average number of daily loans across borrowers 0.9 1.1
Median borrower’s average number of daily loans 0.3 0.4
Observations 42,886 55,675

Note: Data sourced from CCIP matched sample of originated loans in 2021 and 2022. The average number of loans on
a given day is defined as the total number of simultaneous loans across all borrowers on each day of the respective
year, divided by the 365 days. The median number of loans on a given day is by taking the average number of loans
per consumer and the median of that number across consumers. All statistics are conditional on having at least one
originated loan in the given year.

Growth in the average number of loans per borrower is driven, in part, by heavy BNPL users. We
define heavy users as those who, on average over the year, originated more than one BNPL loan
per month (i.e., more than 12 loans each year). We define occasional users as those who

19 CONSUMER FINANCIAL PROTECTION BUREAU

originated between one and twelve BNPL loans. As shown in Table 6, heavy users accounted for
approximately one-fifth of borrowers in 2021 and 2022. By definition, heavy users’ borrowing
behavior differs substantially from that of occasional users. The average heavy user (i.e. the
median among heavy users) originated 22 and 23 BNPL loans in 2021 and 2022 respectively,
while the median occasional user originated just two loans annually over the same time period.
Broken down into a daily average, the median heavy user held almost three active loans on any
given day. Heavy users also took much less time between their originations than did occasional
users. Table 13 in the Appendix breaks down the share of heavy users and occasional users by
FICO score category for 2022 and shows that 68 percent of originations from heavy users have
either a deep subprime or subprime credit score or do not have a FICO score.

TABLE 6: BNPL BORROWER STATISTICS, HEAVY VS. OCCASIONAL USERS

2021 2022
Occasional Occasional
Heavy Users Heavy Users
Users Users
Share of Users 18.3% 81.7% 20.3% 79.7%
Median originations by
22 2 23 2
consumer
Median days between by
13.4 38.0 13.6 41.4
originations
Median borrower’s average
2.5 0.2 2.6 0.3
number of daily loans
Observations 7,833 35,053 11,290 44,385

Note: Data sourced from the CCIP matched sample of originated loans in 2021 and 2022. The median number of
loans on a given day is by taking the average number of loans per consumer and the median of that number across
consumers. All statistics are conditional on having at least one originated loan in the given year.

From 2019 to 2022, average BNPL default rates, defined as the percentage of originated loans
that were 120+ days past due, remained below 3 percent (Table 7). Default rates are highest
amongst the youngest borrowers, those between ages 18 and 24.

20 CONSUMER FINANCIAL PROTECTION BUREAU

TABLE 7: BNPL DEFAULT RATES BY AGE GROUP, 2019-2022

18-24 25-33 34-40 41-50 51-64 65+ Overall

Total 2.9% 2.4% 1.9% 1.5% 1.5% 1.4% 2.1%
2019 2.6% 1.9% 1.4% 1.9% 1.2% 4.8% 1.9%
2020 2.3% 1.7% 1.2% 0.9% 1.1% 1.0% 1.5%
2021 3.5% 2.9% 2.2% 1.8% 2.0% 1.3% 2.5%
2022 2.7% 2.2% 1.9% 1.5% 1.3% 1.4% 1.9%

Note: Data sourced from the CCIP matched sample of originated loans. Default is defined as 120+ days past due.
Default rates are calculated as a share of originations in each age group reported as 120+ days past due.

To help put these default rates in context, we compare default rates for BNPL and for credit
cards. While we undertake this comparison between BNPL repayment and credit card
repayment, we note that there are structural differences between the two products that could
lead to different repayment and default rates. For instance, the difference in default rates
between BNPL and credit cards is likely due in part to the fact that BNPL lenders require
borrowers to set up automatic repayment using their debit or credit card. 25 Nonetheless, Table 7
shows that BNPL default rates are quite low compared to credit card default rates for the same
population, despite both increased loan stacking and the fact that the many BNPL users have
low credit scores (Table 8). Indeed, BNPL borrowers defaulted on their credit cards at much
higher rates over the same time period, defaulting over 10 percent of the time. Table 14 in the
Appendix additionally shows default rates defined as the share of the open credit amount that
BNPL borrowers charged off for BNPL and credit card accounts.

TABLE 8: CREDIT CARD DEFAULT RATES OF BNPL BORROWERS BY AGE GROUP, 2019-2022

18-24 25-33 34-40 41-50 51-64 65+ Overall

Total 7.3% 10.4% 11.7% 11.0% 8.7% 6.3% 10.1%
2019 12.7% 16.0% 15.7% 14.7% 11.9% 11.5% 14.7%
2020 8.1% 12.4% 14.6% 13.5% 10.2% 7.0% 12.3%
2021 6.6% 10.0% 11.6% 11.1% 9.1% 6.7% 10.1%
2022 5.4% 8.8% 10.0% 9.6% 7.8% 6.0% 8.7%

Note: This sample is a subset of the matched CCIP sample who also have credit cards. Default rates are calculated as
the share of credit cards in a given year and age group that were 120+ days past due. Credit card companies may use
different definitions for default. We define them here as 120+ days past due for the purpose of comparison with Table
7.

25 See Kleinbard et al. 2022.

21 CONSUMER FINANCIAL PROTECTION BUREAU

VI. Total Unsecured Consumer
Debt Burden
Consumers choose from many types of unsecured credit options, of which Buy Now, Pay Later
loans are one option. Other types of unsecured credit that we observe in the credit bureau
records include student loans, credit cards, personal loans, retail loans, and other types of
alternative financial services from sub-prime lenders, such as payday and installment loans. We
define a consumer’s total unsecured debt burden as the sum of open balances in these types of
loans and their total BNPL purchase amounts.

Table 9 shows that heavy BNPL users defined, as above, as borrowers who originated more than
12 BNPL loans in 2022, are more likely than occasional BNPL borrowers and non-BNPL
borrowers to have open balances in all types of unsecured credit products examined. We do not
observe directly whether consumers with credit card open balances are revolving and thus
paying interest on the balance or simply transacting on the credit card. Nonetheless, we note
that 89 percent of heavy BNPL users have open balances on credit cards compared to 85 percent
of occasional borrowers and 82 percent of non-BNPL borrowers. Heavy BNPL users are also
approximately 11 percentage points more likely than occasional BNPL borrowers and 31
percentage points more likely than non-BNPL borrowers to have open balances on personal
loans. Heavy BNPL borrowers are more than twice as likely and occasional BNPL borrowers are
almost twice as likely to have open student loan balances compared to non-BNPL borrowers.
Finally, whereas only one percent of consumers without any BNPL loans in 2022 had open
balances in subprime AFS, nearly eight percent of heavy BNPL borrowers and nearly four
percent of occasional BNPL borrowers also had open AFS balances in 2022.

TABLE 9: SHARE OF CONSUMERS WITH ANY AMOUNT OPEN, UNSECURED BALANCES IN 2022, BY BNPL
BORROWER GROUP

Heavy BNPL Occasional BNPL

No BNPL use
users users
Credit cards 89.2% 84.6% 81.5%
Personal loans 49.2% 38.4% 18.3%
Retail loans 54.9% 46.5% 36.6%
Alternative financial services 7.8% 3.9% 0.9%
Student loans 45.3% 39.7% 21.0%
Observations 11,291 44,384 469,098

Note: CCIP matched sample. The sample omits observations from one firm that did not provide sufficient information
to match their BNPL records to credit records. Observation counts not adjusted for the match rate between BNPL and

22 CONSUMER FINANCIAL PROTECTION BUREAU

credit records. Heavy use is defined as more than 12 BNPL loans originated in 2022. Occasional use is defined as
having originated between one and 12 BNPL loans in 2022.

Figure 6 depicts average monthly open balances in unsecured consumer debt for heavy and
occasional BNPL users and non-BNPL users in 2022. For all types of unsecured credit, we
calculate a group average for all consumers in the CCIP across all months of 2022. Zero balances
are included for the purpose of providing a representative statistic for consumers with a credit
record in each BNPL use group. Consequently, the average amount of open balances is lower for
credit types in which consumers are less likely to have any balance amount open, for instance if
they do not use that type of credit (AFS).

Among types of unsecured credit held by BNPL borrowers, student loans dominate, with heavy
users owing approximately $16,800 in student loans on average and occasional BNPL users
owing approximately $13,200 on average. Open balances on credit cards amounts to
approximately $4,600-$4,800 across BNPL borrowers and non-BNPL borrowers alike. In the
Appendix, Figure 8 shows these amounts as an average share of total unsecured consumer debt
for each of these BNPL borrower groups (heavy, occasional and no BNPL) and reveals that
BNPL purchases comprise only two percent of total unsecured consumer debt even for heavy
BNPL borrowers on average. This observation is due to the relatively low average monthly
amounts of BNPL compared to student loans and credit card balances. Because these data do
not contain all BNPL loans consumers may have, BNPL amounts and the share of BNPL in
consumers’ total unsecured debt portfolio represent lower bound estimates.

While BNPL purchases made up only two percent of heavy BNPL borrowers’ total unsecured
consumer debt on average in 2022, and one percent on average for the occasional BNPL
borrower, BNPL constitutes a larger share of unsecured consumer debt for some consumers in
the months in which they use it. As shown in the above sections, many BNPL borrowers move in
and out of borrowing with BNPL. 26 They may have several loans one month and then zero in a
later month. Table 10 homes in on BNPL borrower behavior in the months in which consumers
borrow with BNPL and provides context to BNPL purchases during these periods.

26Appendix Figure 7 further shows that, on average, BNPL borrowers purchased $200 worth of
merchandise on their first BNPL purchase, followed by an average of around $50 per month after first-
time use.

23 CONSUMER FINANCIAL PROTECTION BUREAU

FIGURE 6: AVERAGE MONTHLY DOLLAR AMOUNTS OF UNSECURED CONSUMER DEBT, BY BNPL
BORROWER GROUP AND COMPONENT, 2022

Note: CCIP matched sample. Accounts are weighted according to whether they are joint or individual accounts.
Balances reflect those opened within 45 days of each archive month for traditional loans and within the last 30 days
for alternative financial services. The sample omits observations from one firm that did not provide sufficient
information to match their BNPL records to credit records. Average monthly amounts have been CPI-adjusted to
September 2024 dollars and include zeros for consumers with zero open balances, either because they did not borrow
with the respective credit product that month or because their open balance was zero dollars.

On average, BNPL borrowers with a credit record held $22,163 in monthly unsecured consumer
credit, of which $242 stemmed from BNPL purchases. The ratio of these two numbers yields the
approximate one percent share of unsecured debt, calculated in Appendix Figure 8 and
discussed further above. However, Table 10 shows that this share reaches 17 percent when
calculated as a share at the consumer level, and subsequently averaged across consumers. This
difference indicates that BNPL balances comprise a much higher share of total consumer debt
burdens among BNPL borrowers with lower than median levels of non-BNPL credit. The
youngest age group, consumers between 18 and 24, hold substantially lower levels of consumer

24 CONSUMER FINANCIAL PROTECTION BUREAU

debt, averaging around $9,000 monthly. 27 Consequently, BNPL comprises 28 percent of
unsecured consumer debt for active BNPL borrowers in this age group on average when
measured at the consumer level, and approximately seven percent for the median BNPL
borrower between age 18-24 (not shown).

BNPL financing is particularly popular among young consumers aged 18-24 and aged 25-33,
with around 37 percent and 34 percent, respectively, having financed at least one purchase in
2022 using BNPL. Consumers in the age range of 34-40 also had an above-average likelihood of
borrowing with BNPL, at approximately 29 percent.

Consumers may be relying on BNPL when other credit is unavailable. Table 10 displays BNPL as
a share of available non-BNPL credit from credit cards and personal loans. Overall, the total
amount of merchandise purchased using BNPL is about 45 percent of BNPL borrowers’ overall
credit availability in the months in which they borrow using BNPL and around 60 percent
among consumers aged 18-24.

TABLE 10: AVERAGE MONTHLY UNSECURED DEBT BY AGE GROUP, 2022

BNPL BNPL share

BNPL share
purchases of
Share of Unsecured of available
among unsecured
BNPL debt credit
BNPL debt among
borrowers amount ($) among
borrowers BNPL
borrowers
($) borrowers
Age 18-24 37.1% 9,068 202 59.5% 27.9%
Age 25-33 33.6% 20,486 242 46.9% 16.6%
Age 34-40 28.7% 25,425 267 43.7% 16.0%
Age 41-50 19.1% 28,991 260 40.1% 14.1%
Age 51-64 9.9% 26,453 231 33.2% 14.2%
Age 65+ 5.9% 17,352 196 24.2% 15.5%
Average 21.2% 22,162 242 44.8% 17.3%

Note: Matched CCIP sample. Accounts are weighted according to whether they are joint or individual accounts.
Balances reflect those opened within 45 days of each archive month for traditional loans and within the last 30 days
for alternative financial services. Unsecured debt amounts, BNPL purchase amounts, BNPL share of available credit
and BNPL share of unsecured debt are calculated at the consumer level before taking an average across consumers in
each age group. Unsecured consumer debt encompasses student loans, credit cards, personal loans, BNPL and
alternative financial services such as subprime installment and payday loans. Available credit is defined as all credit

27 Appendix Figure 9 shows that this age group holds lower amounts of credit card debt than all other age
groups and lower amounts of student loan debt compared to consumers aged 25-50.

25 CONSUMER FINANCIAL PROTECTION BUREAU

card and personal loan limits less balances on those accounts. All numbers represent an average across months in
2022 for each age group in the given month. Amounts have been CPI adjusted to September 2024 dollars.

The preceding sections have shown heterogeneous usage patterns by age and credit score that
are reflected in average consumer debt profiles of those groups. The following analysis takes a
deeper look at conditional correlations of BNPL use and the amount of consumer debt held
across different types of credit when controlling for age, credit score and seasonal variation in
BNPL use. Table 11 shows the results of separate ordinary least squares regressions of an
indicator for BNPL use in each month on the amount of open balances held in each type of non-
BNPL financial product. Regressions are at the consumer-month level for all months in 2020-
2022 and contain month-year fixed effects, as well as indicator variables for age and credit score
category.

In an average month in which consumers finance at least one purchase using BNPL, they hold
more unsecured consumer debt than consumers who did not use BNPL that month, in all non-
BNPL categories of credit examined, even controlling for age, credit score and seasonal
variation. For instance, BNPL borrowers have $871 more in open credit card balances, $5,734
more in student loans, $453 more in personal loans and $292 more in retail loans compared to
their non-BNPL borrower counterparts. BNPL borrowers also have $0.37 more in payday
balances on average and $29 dollars in other types of AFS credit, most of which are subprime
installment loans. All of these differences are significant at a 99 percent level of confidence.

TABLE 11: CONDITIONAL CORRELATIONS BETWEEN BNPL USE AND NON-BNPL UNSECURED DEBT,
2020-2022

Magnitude
Mean of Standard
Outcome variable Coefficient (percent of Obs.
variable Errors
mean)
Personal loan balances ($) 2,099 453.0*** 31.6 21.6% 6,124,561
Retail loan balances ($) 791 291.5*** 10.8 36.9% 6,124,561
Student loan balances ($) 15,800 5733.6*** 201.4 36.3% 6,124,561
Credit card balances ($) 4,803 871.1*** 41.4 18.1% 6,124,561
Payday balances ($) 0.66 0.37*** 0.1 55.9% 6,124,561
Other AFS balances ($) 49 28.6*** 2.0 58.6% 6,124,561

Note: Matched CCIP sample. Accounts are weighted according to whether they are joint or individual accounts.
Balances reflect those opened within 45 days of each archive month for traditional loans and within the last 30 days
for alternative financial services. Each balance type represents a separate regression of that outcome on having any
amount of BNPL in the given month and controls for credit score bin, age and time (year-month fixed effects). Zero
balances included. AFS=alternative financial services. Other AFS balances are primarily from subprime installment
loans. Standard errors are clustered at the consumer level. *** indicates a p-value greater than 0.01.

26 CONSUMER FINANCIAL PROTECTION BUREAU

The relationships shown in Table 11 should not be interpreted as causal. This report does not
provide evidence that BNPL induces increases in any of the non-BNPL credit products
examined. With the evidence currently available, it is equally plausible that increases in other
types of credit or decreases in the share of available credit make it more likely for consumers to
finance purchases using BNPL. 28 For illustration, we investigate credit card utilization rates in
the months leading up to and following the first time we observe a consumer financing a
purchase with BNPL, exhibited in Figure 7.

During the year leading up to first-time BNPL use, the average credit card utilization rate
increases. Following first-time BNPL use, credit card utilization rates level off somewhat and
then continue to increase, but at a lower rate than before first-time use. This pattern may
indicate some substitution between BNPL and credit card use. We leave a more thorough
examination of this question for future research.

In addition to the trend in the credit card utilization rate, the average rate among BNPL
borrowers is notably high, between 60 and 66 percent. During the same time period from 2020-
2023, the average utilization rate in our sample among consumers who we never observed using
BNPL is 34 percent, with a median rate of 16 percent. Utilization rates above 30 percent may
negatively impact consumers’ credit scores such that higher rates often indicate financial
vulnerability. 29 The median credit card utilization rate among consumers ever observed using
BNPL in this same period is 70 percent. Appendix Figure 11 displays the 25th to 75th percentiles
of credit card utilization rates from the time of first BNPL use and further shows that there is a
large amount of heterogeneity in rates, with a fairly stable mean and median.

28 We likewise cannot rule out an impact from other omitted variables that we do not observe.
29See “Credit score myths that might be holding you back from improving your credit,” CFPB (January
2019), available at https://www.consumerfinance.gov/about-us/blog/credit-score-myths-might-be-
holding-you-back-improving-your-credit/ (last visited December 15, 2024). We note that because this
statistic contains both credit card revolvers (i.e. consumers who carry a balance and pay interest from
month to month) and transactors, a high utilization rate in any given month does not necessarily
indicate financial distress. However, persistently high rates may.

27 CONSUMER FINANCIAL PROTECTION BUREAU

FIGURE 7: CREDIT CARD UTILIZATION RATE BEFORE AND AFTER FIRST-TIME BNPL USE

Note: Matched CCIP sample of BNPL borrowers who originated their first BNPL loan between 2020 and 2022. The
sample omits observations from one firm that did not provide sufficient information to match BNPL records to the
credit records. This omission may introduce some measurement error if a consumer’s first-time use was with a firm
omitted from this dataset. The grey shaded region represents a confidence interval of 95 percent around the mean.
Credit card utilization is defined as the total balances on open credit cards divided by the total credit card limits on
those cards. Stale accounts older than 45 days from the report date are excluded and accounts are weighted according
to whether they are joint or individual accounts.

28 CONSUMER FINANCIAL PROTECTION BUREAU

Conclusion
This report provides the first descriptive, consumer-level analysis of BNPL use leveraging linked
BNPL applications and originations with credit records. Findings reveal that approximately 21
percent of consumers with a credit record financed at least one pay-in-four BNPL loan with one
of the six BNPL firms (Affirm, Afterpay, Klarna, PayPal, Sezzle or Zip) in 2022, and that
approximately 20 percent of these BNPL borrowers are heavy users, financing more than one
purchase per month with BNPL. In addition, approximately 63 percent of borrowers in 2022
originated multiple simultaneous loans at some point during the year, and 33 percent did so
across multiple firms. Low purchase amounts on average compared to credit cards and student
loan balances show that BNPL composes only one percent of total annual unsecured consumer
debt, on average. However, this low average share masks a great deal of heterogeneity. Young
consumers and consumers with low or no credit score are more likely than average to choose
BNPL. For instance, consumers in the age range of 18-24 are almost twice as likely (37 percent)
to finance a purchase with BNPL, and for borrowers in this age group, BNPL purchases
represent an average of 28 percent of total consumer financial debt in the months in which they
borrow.

In this report, we find that, in an average month in which consumers finance at least one
purchase using BNPL, they hold more non-BNPL unsecured consumer debt than consumers
who did not use BNPL that month, in all non-BNPL categories of credit examined: credit cards,
retail and personal loans, student loans and other types of alternative financial service loans. At
the same time, we also document an increase in credit card utilization rates in the months
preceding consumers’ first-time BNPL use. The analysis in this report does not determine
whether BNPL causally induces increases in non-BNPL consumer debt, or whether consumers
increase their use of BNPL in response to decreases in available credit, or whether neither is the
case. The importance of BNPL in the credit profiles of BNPL borrowers underlines the need for
further research to understand how this growing financial product causally impacts borrowers’
financial health.

29 CONSUMER FINANCIAL PROTECTION BUREAU

APPENDIX A: ADDITIONAL TABLES AND FIGURES
TABLE 12: ORIGINATIONS AND APPROVAL RATE BY AGE COHORT, 2021-2022

Raw Sample Matched Sample

Share of Share of
Age Cohort Approval Rate Approval Rate
Originations Originations
18-24 13.6% 69.1% 12.6% 69.3%
25-33 32.0% 77.8% 33.6% 76.5%
34-40 21.2% 80.4% 20.2% 78.7%
41-50 20.3% 82.2% 21.6% 81.4%
51-64 11.7% 83.7% 11.3% 81.6%
65+ 1.4% 82.7% 0.8% 79.7%
Observations 77,809,860 115,429,204 1,060,310 1,603,285

Note: These statistics omit consumers for whom age information was missing in the dataset. The raw, unmatched
sample uses consumer-reported age information at the time of application. The matched sample uses the date of birth
in the consumer’s credit record. Shares of originations may not sum to exactly 100 percent due to rounding to one
digit after the decimal point.

TABLE 13: ORIGINATIONS AND DEFAULT RATE BY FICO CATEGORY, 2022

Share of Originations Default Rate

Occasional Occasional
Heavy Users Heavy Users
Users Users
No Score 3.6% 5.2% 1.1% 6.2%
Deep Subprime 46.8% 33.5% 2.1% 6.8%
Subprime 17.6% 13.8% 0.6% 2.7%
Near-prime 12.7% 14.7% 0.3% 1.5%
Prime 12.1% 17.8% 0.4% 0.9%
Super-prime 7.2% 14.9% 0.2% 0.7%
Observations 11,291 44,384 11,291 44,384

Note: Matched CCIP sample of BNPL borrowers who originated a BNPL loan in 2022. Shares of originations may not
sum to exactly 100 percent due to rounding to one digit after the decimal point. Default rates are calculated as a share
of originations in each FICO category reported as 120+ days past due. FICO score categories are defined as 300-579
for deep subprime, 580-619 for subprime, 620-659 for near prime, 660-719 for prime, and 720-850 for super-prime.

30 CONSUMER FINANCIAL PROTECTION BUREAU

TABLE 14: SHARE OF CREDIT AMOUNT CHARGED OFF, AMONG BNPL BORROWERS

Year BNPL percent charged off Credit card percent charged off
2020 1.9% 15.5%
2021 2.2% 14.3%
2022 1.4% 10.9%

Note: Subsample of BNPL borrowers in the CCIP matched sample. The table shows the share of total open credit
amounts on each product that was charged off among BNPL borrowers in the given year.

FIGURE 8: PERCENT OF UNSECURED CONSUMER DEBT PROFILE, BY BNPL USER TYPE IN 2022

Note: CCIP matched sample. Percents shown are an average across all consumers in the given BNPL user group. Zero
balances are included. Numbers are rounded to the nearest percent. AFS = alternative financial services defined as
non-traditional consumer loans from subprime lenders.

31 CONSUMER FINANCIAL PROTECTION BUREAU

FIGURE 9: AVERAGE MONTHLY DOLLAR AMOUNTS OF UNSECURED CONSUMER DEBT, BY AGE GROUP
AND COMPONENT, 2022

Note: CCIP matched sample. Amounts have been CPI-adjusted to September 2024 dollars. Zero balances included.

32 CONSUMER FINANCIAL PROTECTION BUREAU

FIGURE 10: AVERAGE AMOUNT OF BNPL PURCHASES IN THE MONTHS BEFORE AND AFTER FIRST-TIME
USE

Note: CCIP matched sample. Amounts have been CPI-adjusted to September 2024 dollars. Zero balances included.
First time BNPL use is defined among the five firms that provided sufficient information to match consumers to the
credit records.

33 CONSUMER FINANCIAL PROTECTION BUREAU

FIGURE 11: CREDIT CARD UTILIZATION RATE DISTRIBUTION AROUND THE MONTH OF FIRST-TIME BNPL
USE

Note: CCIP matched sample. Amounts have been CPI-adjusted to September 2024 dollars. Zero balances included.
First time BNPL use is defined among the five firms that provided sufficient information to match consumers to the
credit records.

34 CONSUMER FINANCIAL PROTECTION BUREAU