BNPL Holiday Spending Heads for $21.3B Record as Stress Rises

More shoppers plan to pay in installments

Buy now, pay later is headed into the 2026 holiday season with more momentum than in 2025. Several consumer surveys released this fall find growing interest in splitting gift purchases into installments, even as more households say money is tighter. The clearest example comes from consulting firm TSG. Its analyst Kelly Prange said roughly half of the people it surveyed expect to use BNPL this season. Twenty percent plan to use it more often than last year, while 9% plan to use it less.13

The total dollar amount is also expected to reach a new high. Adobe forecasts that U.S. shoppers will spend a record $21.3 billion online through BNPL in November and December, a 6.6% increase over 2025.151 That figure counts purchases financed through these services. It does not measure debt that has gone unpaid.15

The overall direction is clear, but the surveys disagree on how many people will actually use BNPL. The gap is wide enough to be worth explaining.

The survey numbers don't agree

PayPal hired Morning Consult to poll 2,005 adults in early September. It found that 55% of U.S. consumers have used or considered BNPL. Of that group, three-quarters plan to use it, or are thinking about it, for holiday shopping.17 PayPal reported that this is more interest than last year, when half of 1,000 respondents expected to use BNPL for holiday expenses.14 A NerdWallet survey run by The Harris Poll put the share lower, at nearly two in five holiday spenders.1215 An Invoice Home survey run by Censuswide found that only 15% of consumers plan to use BNPL for holiday costs, though that rose to 21% among millennials.19

A range from 15% to roughly half is not a minor disagreement. The surveys asked different questions. Some asked about firm plans, some about whether people were considering it, and some only asked people who had used BNPL before. The full study from TSG and the Electronic Transactions Association also shows that the public is divided. Thirty-seven percent of respondents view BNPL favorably and 36% unfavorably, while 20% expect to use it more this season.18

The most defensible reading is that BNPL is gaining ground among people who already use it, not winning over most shoppers. Adobe's 6.6% growth forecast is steady but modest. It fits that picture better than the headline survey percentages do.15

Growing financial strain

The ETA-TSG study shows how shoppers' finances have changed. Forty-four percent of consumers feel more financially stressed than a year ago, compared with 27% in 2025. Thirty percent report more debt than two years ago, up from 17%. A third say they usually take on holiday debt or probably will this year, compared with 19% last year.18

PayPal found a similar contradiction. Fifty-eight percent of respondents are more worried about their finances than last year, yet 64% expect to spend the same as or more than they did in 2025.11 NerdWallet found shoppers reducing their gift budgets. Planned gift spending averages $879, down 21% from the $1,107 people expected to spend last year.12 KPMG found the opposite: average planned holiday spending of $783, 5% above what respondents said they spent last year.20

Taken together, the data show households trying to keep holiday traditions going on budgets that feel smaller. In that situation, spreading payments over time is appealing. PayPal said 59% of consumers value BNPL as a way to stretch and control their holiday budget.14 Fifty-seven percent said it would help them pay for gifts for several people.17

Will people be able to pay it back?

On this question, the reporting is sharply split.

The warning signs are serious. Among NerdWallet respondents planning to use BNPL, 38% expect they won't be able to make their payments in full and on time.1215 That reflects expectations before the season, not actual defaults, but it is a lot of people expecting to fall behind.15 A Federal Reserve analysis published in August found that 26% of BNPL users paid late at least once in 2025, and 11% said a BNPL payment caused an overdraft or insufficient-funds fee.15 LendingTree's tracker shows the problem getting worse. Forty-seven percent of users reported at least one late payment in the past year, up from 41% the year before and 34% two years earlier.10

Use for everyday necessities is another concern. The Fed found that one in five users financed groceries or food delivery in 2025.15 Kassandra Martinchek of the Urban Institute said about one in ten working-age adults have bought groceries this way, and roughly a third of them missed a payment.13

The providers point to their own numbers. Affirm says its October-to-December 2025 quarter was its largest ever by transaction volume at the time. Even so, only 2.7% of its monthly installment balances were 30 or more days past due.1 The company argues that heavier use of pay-over-time products does not mean more consumers are in financial trouble, and notes that it does not profit from late fees.1 Afterpay said in January that 96% of customers who financed Black Friday and Cyber Monday purchases repaid on time or early.11

Both sets of figures can be accurate. Lender delinquency rates measure loans that are seriously overdue. Survey questions about any late payment catch smaller slips, and those can still lead to fees and overdrafts. Charge-off rates on BNPL have stayed below credit-card levels, partly because most plans are short.10 But the steady rise in self-reported late payments suggests the pressure is building where lender balance sheets don't show it.

Retailers are signing BNPL deals before the rush

The biggest commercial story is at the online checkout. Affirm signed a multi-year deal to become Sam's Club's exclusive BNPL provider. It will launch on the retailer's website in the coming weeks and in stores in 2027.9 The deal matters because Klarna replaced Affirm as Walmart's exclusive U.S. BNPL partner in March 2025, ending a relationship Affirm had held since 2019.5 Winning Walmart's warehouse-club chain just before the holidays, and about two weeks before its November 5 earnings report, gives Affirm a timely win.5

Klarna has been signing retailers too. Kohl's shoppers can now pay with Klarna online and in the Kohl's app. The options are pay in full, four interest-free payments, or monthly financing for larger purchases.7 Klarna says its network includes more than 1.2 million retailers.7 It also recently became a payment option on CarParts.com.7

The merchant data explains why retailers want these options. In PayPal's survey, 42% of consumers said they would be more likely to buy something if BNPL were offered.17 In the ETA-TSG study, 57% said they would react negatively if a merchant didn't accept their preferred payment method. That includes shopping elsewhere, giving up on the purchase, or being less likely to come back.18 For retailers, adding BNPL has become a competitive necessity.

Not every shopper is moving toward credit. KPMG found that 73% of respondents prefer debit cards, up from 65% last year, which suggests many people want to spend only money they already have.20

Rules and credit reporting are unsettled

People using BNPL this season face uncertain rules. The CFPB withdrew its 2024 rule that would have treated BNPL like credit cards and has said it will not bring it back. States are stepping in, and New York is building a licensing system.6 Credit reporting is also inconsistent. Affirm reports pay-over-time loans to Experian and TransUnion. Klarna and Afterpay do not report U.S. pay-in-four data.6 FICO introduced scoring models that include BNPL in 2025, but lenders choose which score version to use, and many still use older ones.3

That creates a practical risk. Someone with plans on several apps may have some loans on their credit report and others missing, which makes it harder for them and their lenders to see their total obligations.

The bottom line

The conclusion here is that BNPL's holiday growth is real but more modest than the survey headlines suggest. It also depends on a group of borrowers whose finances look weaker than last year. Providers can fairly say their delinquency rates are better than revolving credit-card debt. Still, rising self-reported late payments and growing use for groceries suggest some households are using installments to cover monthly cash shortfalls. The Affirm and Klarna deals with retailers will make BNPL even easier to pick at checkout. Whether the record $21.3 billion season turns out well will depend on how many of those installments are paid on time once the bills arrive in January.