Thane Armbruster of St. Joseph, Missouri, has used Buy Now, Pay Later loan programs several times to buy more expensive items he needs with 0% interest promotions.

More shoppers are open to using buy now, pay later loans, especially as the holiday gift-buying season approaches and as shoppers are more worried about rising prices and financial stress, according to a new survey by PayPal. USA TODAY got an exclusive first look at the survey.

As the calendar starts to turn to the holidays, 60% of participants said they were feeling more financial stress in a survey by Talker Research for PayPal.

The survey also showed that "about 80% of shoppers who have used or considered using BNPL are open to using it for holiday shopping this year, making it effectively a mainstream choice at this point," Michelle Gill, general manager, small business and financial services at PayPal, told USA TODAY.

What are buy now, pay later loans?

BNPLs offer shoppers the option to pay for purchases in installments, usually with no or minimal interest, no hard credit check and near-instant approval.

Shoppers can use services like Affirm, Klarna, Afterpay and PayPal as options to pay when checking out during an online purchase. Some credit cards also offer similar options, like the Chase Freedom card. Depending on the size of the purchase and the company's product, shoppers can select the number of payments, how frequently they occur and what fees they are willing to pay, if any. The BNPL model also allows shoppers to have multiple loans with the same or different providers open at once.

FICO earlier in 2025 said it would begin factoring in BNPL loans in people's credit scores starting in the fall of 2025. Some BNPL providers, like Affirm and Klarna, report activity to some of the credit bureaus, USA TODAY has previously reported. But not all BNPL providers are required to report activity. PayPal is not reporting BNPL loans to credit bureaus, Gill said.

Younger generations are using BNPL more

Younger generations appear to be the most common adopters of digital BNPL loans, USA TODAY has previously reported.

Gen Z and millennials seem to be using BNPL more, with about 10% of each generation taking advantage of them, according to a Bank of America report in June. That follows a three-year period of slowing use after digital BNPL platforms saw a rise in popularity.

“For some people, it’s because it’s convenient, but there are some who are reaching for it because they’ve perhaps been a bit financially stressed,” said David Tinsley, senior economist at the Bank of America Institute, previously told USA TODAY.

BNPL loans help consumers make bigger purchases

Thane Armbruster, 32, of St. Joseph, Missouri, has used a variety of BNPL products to buy both personal and work items for his tutoring business.

Armbruster likes that he doesn't have to get credit checks on his purchases and he has been able to use BNPL programs that offer 0% interest. He has paid off four BNPL loans with no interest for a phone, laptop and software and he has a BNPL loan for some furniture and another phone.

Three years ago, Armbruster's laptop needed a repair and was under warranty, but because of supply chain issues, the part wouldn't be available for several months. Armbruster needed a laptop. He used a BNPL 0% interest program to buy a $2,000 laptop.

"With Buy Now, Pay Later, I was able to pay more to get something that was going to last me, where I wouldn't have to junk it or replace it after a short period of time," he said.

PayPal introduces some new options

PayPal has two BNPL options: a Pay in 4 option, which splits the payments into immediate, four bi-weekly payments with no interest, and a Pay Monthly option for larger payments and with options for repayment from three to 24 months and up to $10,000 in purchases with interest charged, said Gill.

PayPal is introducing two promotions for the holidays: Customers will earn 5% cash back on PayPal BNPL purchases from Oct. 6 through the end of the year. PayPal is also expanding and offering PayPal Monthly for in-store purchases. Customers can use that option via the PayPal app, Gill said. Other BNPL services, such as Klarna and Affirm, also offer in-store options using an app.

Rachel Barber and Medora Lee contributed to this report. Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at blinfisher@USATODAY.com or follow her on X, Facebook, or Instagram @blinfisher and @blinfisher.bsky.social on Bluesky. Sign up for our free The Daily Money newsletter, which breaks down complex consumer and financial news. Subscribe here.

This article originally appeared on USA TODAY: More shoppers are looking to use Buy Now, Pay Later for holidays, survey says

Reporting by Betty Lin-Fisher, USA TODAY / USA TODAY

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