Traditional credit cards are feeling the heat when it comes to consumer spending. While they still dominate the American credit landscape, their growth in installment usage is lagging behind that of private label store cards.
In fact, private label installment options from retailers for larger purchases have grown at an annual rate of 4.8% over the past two years, while traditional card-based installments have only seen a 0.8% increase.
Even though private label cards make up a small fraction of the overall credit market, their growth rate signals a shift in how consumers are making financial decisions.
These retail-branded cards are gaining traction not just among middle-income households, but also with Gen Z shoppers, who have increased their use of store card installments by almost 20% from 2023 to 2025.
The appeal here is quite straightforward. These options often provide easier terms than traditional credit, come with loyalty perks, and allow consumers to spread out payments without the sting of higher interest rates, whether it’s for furniture or electronics.
Predictability and Control
This trend reflects a wider consumer need for predictability and control over their finances. Many shoppers are less interested in accumulating balances and prefer easy, manageable payments that don’t balloon out of control. This desire is particularly strong among younger generations, though it resonates with a variety of demographics, including middle-income families and baby boomers who are rediscovering the benefits of fixed payment plans.
- Stagnation in traditional installment growth: By May 2025, only 47.8 million consumers will have utilized general-purpose credit cards for installments, which is a mere 0.8% growth from 47.2 million since August 2023.
- Acceleration of private label installments: In May 2025, 30.3 million consumers are projected to use store cards for installments, rising from 27.9 million in May 2023, marking an annual increase of 4.8%.
- Young consumers driving the change: Gen Z’s use of private label installments surged by nearly 20% over the last two years, while millennials saw a modest increase of 0.8% per year. Meanwhile, Gen X usage actually dipped slightly.
Young consumers seem to prefer structured repayment plans, which are reshaping expectations and blurring the lines between credit cards and buy now, pay later (BNPL) alternatives. The slow growth in installment usage on general-purpose cards indicates that banks and networks may need to offer more than just cashback rewards to compete with tailored retail offerings.
For banks and card issuers, the message is simple yet challenging. While private label installments are growing from a smaller starting point, they tap into the essential “sharing” of consumer loyalty and spending that could define the future of credit.
