The news: Middle-income credit cardholders who are satisfied with their card are more likely to use buy now, pay later (BNPL) products than all other BNPL users, per a YouGov survey.

• 48% of satisfied US credit cardholders who used BNPL in the last month reported being middle-income, versus 39% of all BNPL users.
• BNPL users who were satisfied with their credit card were also more likely to be higher income than all BNPL users, at 10% to 8%.

What this means: Satisfaction isn’t enough to retain US credit card users’ exclusive loyalty. While middle- and higher-income adults likely can enjoy the benefits of a credit card without the risks that plague lower-income adults, BNPL products still hold allure:

• 49% satisfied credit cardholders said spreading payments over time was a major benefit of BNPL.
• 41% appreciated the ease of using BNPL. 
• 40% liked that BNPL was interest-free. 

Why this matters: Credit cards and buy now, pay later products often are viewed as opposing debt products competing for total consumer loyalty. YouGov’s survey suggests that the two debt products can coexist, or even complement, a US consumer’s preferred payment lineup.

Our take: Issuers of credit cards should note that even their happiest customers desire the flexibility of interest-free installment plans. Credit card companies can get ahead by marketing their card-linked installment plans to their cardholder bases and capture the BNPL spend that could have been lost to a fintech.

BNPL firms, meanwhile, need to increase consumer satisfaction as they compete with card-linked installment plans. US consumers rank card-linked installment plans No. 1 in terms of customer satisfaction—chipping away at that lead is crucial for BNPL platforms to snag more spend from shoppers who use both traditional and alternative debt products.

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