Americans Splurged on Black Friday — and Quietly Took On Invisible Debt to Do It

The Black Friday shopping period has made one thing abundantly clear: Americans are still buying—but many are doing it on borrowed time. According to Adobe Analytics , consumers spent a record $6.4 billion online on Thanksgiving (+5.3% YoY), heavily driven by aggressive discounting strategies. On Black Friday itself, Adobe reported $11.8 billion in online spend (+9.1% YoY), while Mastercard SpendingPulse showed total retail sales (ex-autos) up 4.1%. If you just look at the top-line numbers, the consumer looks resilient—even enthusiastic. But peel back one layer deeper, and the engine powering this spending shifts uncomfortably from wages to installment financing.

This season, Buy Now, Pay Later (BNPL) isn’t a side feature—it’s central infrastructure. Adobe forecasts $20.2 billion will be financed via BNPL from November 1 through December 31, an +11% YoY increase. Young shoppers drove much of this: Reuters reports that 41% of shoppers aged 16–24 used BNPL this year, and usage among younger millennials (age ~25–32) surged 87%. Meanwhile, higher-income households are still spending with relative ease, while middle- and lower-income consumers increasingly rely on BNPL for flexibility—and in some cases, survival.

The K-shaped economy dynamic is firmly visible in the holiday digitals. As Claudia Lombana remarked, wealthier Americans “are spending at will,” while lower-income consumers are budgeting carefully and timing purchases against promotions. Consumers expect higher prices due to tariffs, inflation, rent pressures, and grocery cost escalation—so they’re adopting BNPL as a coping mechanism. This is consistent with reporting cited by LendingTree: more than 41% of BNPL users paid late on at least one account in 2025, up from 34% in 2024. The consumer isn’t collapsing—but the pressure is building.

And that brings us to the investable side of the story. Publicly-traded BNPL-linked companies include Affirm (AFRM), Block’s Afterpay (via ticker SQ), PayPal’s PayLater (PYPL), Klarna (KLAR), Sezzle (SEZL), and Zip (ZIP). The market rewarded growth in usage—AFRM recently extended its Amazon partnership through January 2026 and posted 42% YoY GMV growth, driving a bullish analyst reset at Citi. Klarna continues to take share and drive MAU growth, although Compass cut its price target from $53 to $48 due to transaction margin compression. Sezzle continues to win praise for risk-adaptive underwriting, particularly its tightening of credit availability as a late-cycle precaution.

But here’s the question every institutional investor is silently asking: Is this high-growth BNPL usage a forward-looking revenue story—or a ticking credit-risk bomb?

There are signals. BNPL defaults and late fees are rising, even if aggregate delinquency reporting is murky. LendingTree data shows 42% of BNPL users missed payments in 2025. Many users have multiple accounts and multiple installment loans, but because BNPL often doesn’t report to bureaus, much of this liability exists as “phantom debt.” A customer may appear credit-healthy on paper while juggling five simultaneous installment loans.

That opacity is exactly why Connecticut Attorney General William Tong recently launched an inquiry into BNPL providers—including Affirm, Afterpay, Klarna, PayPal, Sezzle, and Zip. His statement was intentionally ominous: “Buy now, pay later may appear to be a convenient way to afford a purchase… but shoppers need to watch out for debt traps.”

Tong is specifically demanding data on vetting practices, consumer risk assessments, late fee structures, and credit-reporting methods. He openly stated concern that Trump’s rollback of federal regulatory protections has shifted the burden to the states—and he warned that BNPL could evolve into predatory consumer lending.

Senator Richard Blumenthal echoed that concern, telling holiday shoppers: “A holiday splurge could be a New Year scourge.” He pointed to the explosive growth in BNPL—nearly 1,000% between 2019–2021—and emphasized that BNPL loans lack traditional credit safeguards.

These warnings haven’t yet changed overall market sentiment—but they absolutely will be front-of-mind at the Goldman Sachs Financial Services conference next week. Traditionally, this conference is a temperature-check on consumer credit health. This year, investors will listen very carefully to: • any commentary from Affirm, PayPal, or Klarna on delinquency trends • commentary from traditional lenders (COF, SYF, DFS, JPM) on credit migration • signals of stress in subprime consumer lending • whether BNPL usage is shifting further toward essential purchases

If banks start seeing deterioration in credit cards, auto loans, or unsecured credit lines—the market will very quickly interpret BNPL as a stress indicator rather than a convenience tool.

For now, the official credit metrics haven’t yet “broken.” As Nigel Morris —co-founder of Capital One and a BNPL investor—put it: “Delinquency is not rising yet. Charge-offs are not rising yet. But there’s clearly storm clouds on the horizon.”

That’s where this story stands today: BNPL is enabling holiday spending—but also quietly accumulating risk. The consumer isn’t failing—but they are stretching. And the real test isn’t this weekend’s spending—it’s whether the bills are repaid in January.