The news: Consumers exhibit across-the-board confusion about their eligibility for different credit products, per a report from i2c and PYMNTS. 

Diving deeper: A psychological access gap limits consumers from applying for credit products. 

For example, 42% of consumers doubt they would be approved for a credit card. In contrast, self-reported denials in the study were at just 15%. This is the highest rejection rate of any credit product in the survey, with barriers for access to store cards (9.6%) and buy now, pay later (BNPL) plans (5.5%) much lower.

Counterintuitively, consumers were also less confident about getting approved for BNPL plans (52.5%), store cards (53.3%), or payday loans (44.2%) than they were for credit cards (57.8%). 

Opportunities for credit providers: Consumers seemingly aren’t always aware of what credit products are best for them—or most available. 

Credit products like BNPL and store cards advertise their accessibility or offer free financial literacy programs to reach more eligible customers. For alternate credit providers like Block’s Cash App Afterpay and Cash App Borrow, this strategy marries well with its branding as a champion for the economically disadvantaged.

Our take: BNPL providers are losing their messaging campaigns if consumers think credit cards are more attainable than a pay-in-four plan.

As issuers maintain tight underwriting, BNPL providers can also swoop up consumers who need credit but don’t qualify for new lines of traditional credit. If BNPL platforms can advertise their accessibility for the average consumer, they can capture spend from incumbents. 

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