Brief
Federal Reserve study finds US consumers spent $160 bn on buy‑now‑pay‑later last year
Research shows BNPL use surged for everyday items, rent and groceries, amid a tough job market.
By Felo News Desk · Published
Federal Reserve economists released a study showing Americans spent more than $160 billion on buy‑now‑pay‑later (BNPL) plans in 2025, according to the Independent. The research indicates that pay‑in‑four schemes accounted for roughly half of that total and that overall BNPL usage has risen nearly 80 % since 2023.
What happened
The study, based on Federal Reserve data, breaks down 2025 BNPL spending into two main categories. Pay‑in‑four plans – four installments over six weeks – represented about $80 billion, while the remaining $80 billion came from longer‑ or shorter‑term BNPL products. The report notes a sharp increase in the use of these plans for routine expenses such as groceries, utility bills, transportation and, increasingly, rent.
What the reports add
The Independent adds that experts are observing a shift from BNPL being a convenience to becoming a cash‑flow challenge for many users. Mark Elliott, chief customer officer at Happen Bank (formerly Lending Club), is quoted saying the service is no longer just about convenience. Sara Rathner, NerdWallet’s credit‑card expert, highlighted the broader economic pressures driving the trend, noting a tough job market and rising living costs.
What was said
"It has been very hard out there for a lot of people," Rathner told the Independent. "It’s a tough job market, and it’s a rough economy, and the cost of the things that we buy every day has been going up, in some cases more than people’s incomes." Elliott said, "It isn’t really just a convenience element anymore; it really is becoming a cash flow challenge." The article also includes personal accounts: Elizabeth Brown, 26, of Columbia, South Carolina, said she uses BNPL to afford furniture and groceries, while Jordan Williams, 28, from Greensboro, North Carolina, described using BNPL for concert tickets and later for groceries after a birth‑related financial strain.
How it came about
The surge in BNPL usage follows a broader trend of alternative financing gaining popularity in the United States. Earlier this month, Felo News reported on the launch of a BNPL scheme for GLP‑1 weight‑loss drugs in South Africa, illustrating how the model is expanding into new product categories worldwide.
Key facts
- Americans spent over $160 billion on BNPL plans in 2025 (independent.co.uk)
- Pay‑in‑four plans made up about half of that spending (independent.co.uk)
- BNPL usage rose nearly 80 % since 2023 (independent.co.uk)
- Experts say BNPL is becoming a cash‑flow challenge for many users (independent.co.uk)
- Consumers are using BNPL for everyday expenses including rent and groceries (independent.co.uk)
Sources
- [1] independent.co.uk — originally reported as “Americans are using buy now, pay later more than ever. Here's what to know if you're one of them”
