The data: Early holiday spending is looking robust compared with last year. This year’s September card spend per household on holiday items was the strongest in four years, per a report from Bank of America Institute.

Consumers are also leaning into installments for holiday shopping.

• 8.3% of Bank of America households had a BNPL payment in September, up from August.
• And almost 20% of households using BNPL had repayments over $500.

What this means: Early breakout trends by household income show how consumers are navigating holiday shopping with BNPL.

• Roughly 10% of  lower-income households used BNPL last month, compared with approximately 5% of higher-income households.
• But higher-income households are most likely to have BNPL payments worth over $500.

While lower income households are using payment plans to navigate affordability for gift shopping, higher-income households are using installments as a liquidity tool for major purchases like appliances and home repairs that can’t be easily paid off in a monthly credit card bill. 

We forecast that US households earning over $150,000 will make up the largest share of BNPL users by income group, at 27.5 million.

Implications for merchants and BNPL providers:  Despite rising prices and dour consumer sentiment, consumers are still spending for the holidays. But merchants and payment providers should tailor their BNPL strategies to capture spending from different types of users.

For retailers trying to snag holiday spending from lower-income consumers, advertising installments at checkout may draw in more consumers looking for payment flexibility. BNPL availability influences merchant choice for 64% of heavy BNPL users, per a PYMNTS Intelligence report.

For merchants trying to attract higher-income consumers, expanding into big-ticket categories will be essential. Merchants should partner with BNPL providers to offer financing for large purchases.

Fintechs have a different challenge. Issuers have the advantage of capturing premium users with rewards and card-linked installment. Fintechs can’t compete with issuers unless they can offer more competitive interest rates on long-term installment plans. Seventy-six percent of super-prime BNPL users are willing to pay interest fees for longer-term installment plans, per PYMNTS Intelligence.

Dive deeper: Read our US Buy Now, Pay Later Report Trends 2026.

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