Survey: 43% of Consumers Say Buy Now, Pay Later Has a Role in Holiday Spending

Close to Half of Consumers Used or Plan to Use Buy Now, Pay Later in 2025

To understand the blooming ubiquity of BNPL, look no further than the checkout aisle or payment information page. At many retail outlets and e-commerce stores, consumers will likely see an offer from a BNPL service, such as Affirm, Klarna or Afterpay, alongside more traditional payment methods.

Question: Have you used (or do you plan to use) a BNPL plan for holiday shopping this year?

While younger consumers are often considered to be a target demographic of BNPL plans, all except the oldest consumers indicated their adoption of BNPL plans. Our survey shows more than half of prime working-age consumers (ages 25 to 54) said they will be using (or plan to use) BNPL plans this holiday season.

Household income is also a factor—although not in the way you might expect. Consumers with higher incomes were somewhat more likely to use BNPL in 2025 than those with lower incomes, according to our survey.

Why Consumers Choose Buy Now, Pay Later

With the variety of payment options today's consumers have, many may not consider how they're going to pay for a purchase until the very last minute. That may help explain how BNPL plans have expanded so quickly this decade. The growth of e-commerce only acts as an accelerant to this nascent trend as online shopping captures a greater share of retail sales each successive year.

Still, some consumers are using BNPL plans with more intent than others.

The Federal Reserve Bank of New York, with its own approach, tried answering which factors consumers weigh more heavily in a study this year. The upshot: Consumers expect a discount of some sort for choosing BNPL. That discount can express itself in savings on interest charges versus using a credit card for the same purchase, for instance. However, those with lower credit scores will settle for less than those with good credit scores—in other words, they may be easier to persuade due to their limited alternative options.

Consumers are certainly incentivized to choose BNPL versus cash or credit for reasons related to both finances (most BNPL plans charge no interest if all payments are made on time) and convenience (you don't have to type in a credit card number). Others may choose this option because they couldn't afford to make the purchase otherwise.

Question: What was your main reason for choosing BNPL?

Missed Payments Still a Factor Among Some Consumers

"Managing spending" remains the most important reason to more consumers, and the slight increase in choosing that reason may suggest that some consumers may in fact be tightening budgets and using BNPL for purchases to make ends meet—particularly if BNPL is routinely used for groceries.

Question: Have you ever missed a payment or incurred late fees on a BNPL plan?

Overall, consumers who've used BNPL are missing payments at roughly the same rate as in 2023, with younger consumers and older consumers less likely to miss a payment than their middle-aged counterparts. Consequences can be immediate: Not only will consumers incur late fees if a payment is missed, but BNPL lenders may not extend financing to a consumer with missed payments in the future. For consumers who don't have access to other types of credit, obtaining and retaining BNPL credit can be crucial.

Fortunately, for those still building credit—usually younger consumers—those same BNPL plans can help some consumers onto the first rung of credit, as some BNPL providers begin to report payments to credit bureaus, including Experian. For that reason, on-time BNPL payments could very well become a stepping stone to credit cards, auto loans and other types of credit.

Learn more: How to Pay Off Buy Now, Pay Later Debt