Exploring the Association Between Buy Now, Pay Later (BNPL) Usage and Perceived Financial Well-Being 

Abstract

Buy now, pay later (BNPL) services – providing easier access to credit for retail purchases – are becoming more popular among consumers in the US. With the greater adoption of BNPL services, it is crucial to examine how these services impact the users' evaluations of their financial well-being. Using nationally representative data from the Survey of Household Economics and Decisionmaking (SHED) 2021-2023, this study explores the association between BNPL usage in the past year and perceived current financial well-being. The results of multiple regression analysis show that perceived financial well-being, on average, tends to be lower among BNPL users compared to non-users, even after controlling for socioeconomic factors, underlying financial conditions, and credit constraints. These findings suggest that broader adoption of BNPL services may worsen consumers' financial management challenges, leading to a decline in perceived financial well-being.