Holiday Shopping’s $20.2B Buy Now, Pay Later Binge Masks Growing Financial Strain On Consumers
Splitting payments has become the new American way to celebrate the holidays. Americans will drop a record $20.2B through buy now, pay later (BNPL) services this shopping season — marking an 11% year-over-year jump, per Adobe. But beneath the shopping spree lies a troubling reality, as 58% of users admitted these installment plans were their only path to afford purchases.
- Cyber Monday generated a record $1.03B in BNPL purchases through Klarna, Affirm, and PayPal, marking a new high.
- While online sales between Thanksgiving and Monday jumped 7.7% from last year, shoppers are cutting back on expenses like haircuts and casual dining to keep up with gift-giving.
Financial reckoning ahead: US Public Interest Research Group’s Teresa Murray warned, “We fear people will end up in financial trouble” as the BNPL boom intersects with record credit card balances of $1.233T. Chuck Bell of Consumer Reports adds that juggling multiple loans with different due dates only raises the chance of default, suggesting many households are “living pretty close to the edge.”