BNPL Holiday Spending Rises as Shoppers Start Earlier Than Ever

The holiday season started in September

In most years the U.S. holiday shopping season gets going in late November. This year it was already moving before the leaves turned, and more of it is being paid for in installments at online checkout.

Bank of America's latest card data show that aggregated credit and debit spending rose 6.2% year over year in September. Leaving out gasoline, which has been pushed up by high oil prices, spending still grew 5.1%.1 The bigger signal for retailers was timing. The bank's analysts say spending on holiday items in September 2026 ran well ahead of the same month in 2025. In 2025, holiday buying had already begun earlier than usual, around the second week of October, even though the season's real inflection point normally comes in mid-November.12

The note also covered how people are paying. Bank of America's own deposit data show buy now, pay later (BNPL) use rising seasonally as the winter holidays approach. The analysts said the trend points up but shows "no signs of a sharp acceleration."1 They flagged one detail worth watching: the share of households making BNPL repayments above $500 is rising slowly, which suggests the loans are going toward more expensive purchases.1

The forecasts agree, with small differences

The major forecasts are broadly consistent with the bank's account. Adobe expects U.S. online sales to reach $275.1 billion from November 1 to December 31, up 6.7% from last year.11 Within that total, Adobe projects BNPL will account for a record $21.3 billion, up 6.6% year over year. That is about $1.3 billion more than last season, or more than a full extra Cyber Monday's worth of BNPL spending.3

Adobe expects Cyber Monday to bring $1.09 billion in BNPL purchases. That would be the second year in a row above $1 billion, after 2025 set the first billion-dollar BNPL day at $1.03 billion.12 Black Friday is projected at $807 million in BNPL spending, up 8%.12 Most coverage of the forecast repeated these figures closely, which is expected since they all come from one press release.141518

Adobe's longer-run numbers matter more than the headline. Holiday-season BNPL spending grew 13.7% in 2023, 10.0% in 2024 and 9.8% in 2025. The 2026 forecast of 6.6% would be the slowest increase in Adobe's recent data, though the company gives a possible range of 6% to 9%.12 In other words, BNPL is still growing, but the growth rate is coming down. Adobe's internal deck puts it plainly: BNPL is "maturing into a permanent part of the checkout mix," with about 8% of overall holiday spend.12

That matches Bank of America's "upward but not accelerating" description.1 Two separate datasets, one from merchant transactions and one from bank deposits, point the same way. BNPL now looks like a mature payment method that is expanding steadily, not a surge in borrowing.

The shift to phones

One Adobe figure explains a lot about where BNPL lives. The company expects 82% of BNPL holiday spending to happen on mobile devices rather than desktops, and links that to impulse buying.13 Mobile is projected to make up 57.4% of all online holiday spending, and a record 63% on Thanksgiving Day.13

The overlap is worth thinking about. On a phone, a split-payment button sits right next to the buy button, and the cost of a purchase gets shown as four smaller amounts. PayPal's survey suggests this affects decisions: 42% of respondents said they would be more likely to buy something if BNPL were offered.7 That helps explain why retailers keep putting installment options so prominently in checkout, and why consumer advocates watch the trend so closely.

The earlier calendar adds to it. Adobe expects $95.8 billion in online spending in October alone, up 8%, partly because Amazon's October Prime event has turned into a sales period across the whole industry.13 It also notes that October spending has beaten September by a wider margin every year since 2022.12 Amazon, Target and Walmart all held pre-holiday sales in the first week of October.6 A longer season gives shoppers more chances to split purchases into installments.

Strong spending, gloomy mood

The hardest part of this season to explain is the gap between what people spend and how they say they feel. Mastercard projects holiday spending growth of 5.5%, including 11% growth online, and calls it potentially the strongest season in four years. Consumer sentiment, meanwhile, is close to record lows.5 Ted Rossman of Money Management International called the forecasts "remarkably upbeat" given that mood. One explanation he offered is that the economy is in better shape than people feel, with unemployment still low.5

PayPal's survey, conducted by Morning Consult, shows the same split. Fifty-eight percent of Americans say they feel more financial concern going into the holidays, yet 64% expect to spend the same as or more than last year.7 Fifty-five percent have used or considered BNPL, and three-quarters of that group may use it for holiday shopping.7 Respondents most often valued BNPL for flexibility and for feeling more in control of their budget.7 PayPal sells its own Pay Later products, so its framing should be read with that in mind. Still, the gap between worry and planned spending is notable.

This is where the coverage starts to differ. Bank of America says growth is being driven largely by wealthier households and their stock-market gains. Its analysts think the trend probably continues through year-end unless stocks drop sharply. They also note that some of the strength may come from higher prices rather than more items bought.12 Economic analyst Mark Hamrick takes a less comfortable view. He suggests middle- and lower-income consumers may be using credit and BNPL to fund holiday purchases, which he called "less than optimal" for household finances.5

These two views can both be true. If wealthier households carry the topline numbers while less affluent ones lean more on installments, totals can look healthy while stress builds underneath. The data that best show this split don't come from the forecasts.

Late payments are rising

LendingTree's 2026 BNPL report gives the most worrying figures. Forty-seven percent of BNPL users say they paid late on a BNPL loan in the past year. That is up from 41% in 2025 and 34% in 2024.21 The survey also found more people using BNPL for groceries, more carrying three or more loans at once, and more saying they could not make ends meet without these loans.21 Its monthly tracker shows interest peaking during the holidays. A record 48% of Americans said they were at least considering a BNPL loan in December 2025.21

The aggregate forecasts can't show this. Adobe measures how much money flows through BNPL. LendingTree measures how borrowers are coping. A 6.6% increase in volume is not alarming by itself, but a rising late-payment rate alongside it is. Use for groceries matters too. Coverage of the broader BNPL market notes that people are now using installments for food, bills and rent. That means future income goes toward things already used up, not toward durable goods.29

Bank of America's finding that BNPL users tend to have higher credit card utilization supports this.1 Its observation that more households are repaying over $500 suggests the loans are no longer limited to small add-on purchases.1

Credit reporting is still inconsistent

The consequences of a missed payment are also changing, but unevenly. Affirm began reporting payment data to Experian and TransUnion in 2025, and FICO has introduced scoring models that can include BNPL history.2327 FICO's own validation study found that adding BNPL data moved most Affirm borrowers' scores by fewer than 10 points.23

Coverage disagrees on what the other providers do. Several consumer-finance outlets say Klarna and Afterpay do not report standard U.S. plans to the major bureaus.2324 The Los Angeles Times reports that Klarna, like Affirm, reports to Experian and TransUnion.28 Other guides say Klarna reports only some plans.2630 Because the reporting conflicts, many holiday shoppers likely can't tell whether a given split-payment purchase will appear on their credit file. That uncertainty is a risk of its own.

Fees also differ by provider. Affirm charges no late fees. Klarna caps its fee at $7. Afterpay's fees can reach up to 25% of the order value.2226 LendingTree found that 89% of borrowers who asked to have a late fee waived got it reduced or removed.21

What it adds up to

The coverage supports a clear conclusion. BNPL is now a standard part of online checkout, and this season is likely to set a record. But volume is growing more slowly than in past years, not speeding up. The bigger issue is who is using these loans and how they are holding up. Wealthier households are driving most of the holiday spending, while a rising share of BNPL users are missing payments and using installments for everyday necessities. The early start may help households spread out costs, as Rossman suggests.5 It also gives the borrowers already behind on payments a longer stretch to take on more installment debt. January repayment data will show how much of this season was paid for with future income.