BNPL Use Rises as Credit Card Balances Jump

Household finances are increasingly shaped by credit use, as more consumers carry balances month to month rather than paying off purchases in full.

According to the PYMNTS Intelligence report, “Pay Later Reshapes How America Finances the Holidays,” average monthly credit card balances rose by nearly $200 between April and late 2025, reaching $3,564.

While some of this increase reflects seasonal spending, the report ties the broader rise to persistently higher costs for essentials such as housing and medical care.

The growth in balances is not evenly distributed. Consumers living paycheck to paycheck and struggling to pay their bills saw average balances increase by nearly $600 between April and November.

By contrast, consumers not living paycheck to paycheck experienced a $241 rise over the same period. Higher-income households were the notable exception, with average balances declining modestly, underscoring a widening divide in how credit is absorbed across financial lifestyles.

The report makes a clear distinction between households that use credit as a short-term convenience and those that rely on it as a necessity. Overall, just 42% of consumers reported paying their full credit card balance. Among consumers struggling to pay bills, that figure drops to 28%.

Minimum payments are increasingly common. Fifteen percent of consumers who made a payment paid only the minimum or less. Among financially struggling paycheck-to-paycheck households, nearly 3 in 10 did so.

These households are not simply carrying balances temporarily; they are revolving debt in ways that expose them to higher interest costs and prolonged repayment cycles.

At the same time, the data does not suggest a uniform breakdown in credit discipline. A meaningful share of households continues to manage balances responsibly, particularly those with savings buffers or higher incomes. The tension lies in the growing segment for whom revolving credit is no longer episodic but structural.

The report points to a mixed picture. Rising balances alone do not imply widespread distress, but payment behavior reveals pressure points.

Among consumers already under financial strain, credit increasingly functions as a cash-flow stabilizer rather than a discretionary tool.

This dynamic is reinforced by the broader finding that one in two U.S. consumers struggles to afford daily living expenses. As budgets tighten, households are spreading payments over time rather than absorbing costs upfront, even for routine purchases.

The link between revolving credit and buy now, pay later is especially pronounced. Consumers likely to use BNPL carry average credit card balances $1,128 higher than those unlikely to use it. Habitual BNPL users who finance both essentials and discretionary purchases hold average balances of $5,181, roughly 60% higher than non-users.

For many households, BNPL is not replacing credit cards but complementing them. The data suggests BNPL often acts as a liquidity bridge once credit limits are stretched, particularly among paycheck-to-paycheck consumers.  For consumers managing uneven cash flows, BNPL offers predictability in payments while credit cards absorb residual or unexpected expenses.

Rather than signaling reckless spending, the trend reflects how households sequence multiple forms of short-term credit to manage timing mismatches between income and expenses. How institutions respond to that shift will shape both risk management and product design in the year ahead.

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