Consumers are increasingly turning to credit to manage unplanned expenses, according to a new study by Splitit and PYMNTS. The report, titled “Managing Unplanned Expenses: How The Pay Later Economy Fits Consumer Needs,” surveyed over 7,000 consumers and reveals that more than 53% of Americans are worried about affording unexpected expenses in 2025. Rising costs of goods and economic uncertainty are generating significant financial strain for many Americans, especially for parents and younger consumers.
Credit accessibility is shown to significantly influence spending and payment behaviors. “From trade turbulence to market volatility, Americans are navigating a growing list of financial challenges,” said Nandan Sheth, CEO of Splitit. “Consumers are feeling very anxious at the moment, which is why we see them becoming more strategic in managing unplanned expenses.
They are balancing financial stability with flexible payment options, and credit card-linked installments are providing a smart way to handle life’s surprises.”
Unplanned expenses, particularly emergency car repairs (42.9%) and home repair costs (34.3%), often come with a significant price tag. Despite the growing popularity of Buy Now, Pay Later (BNPL) options, only 9% of consumers used them for emergency purchases. Instead, 38% of Baby Boomers rely on credit cards for emergency costs.
Consumers leaning on flexible payments
The report also highlights broader trends, showing that consumers increasingly depend on credit cards and alternative financing solutions to manage both emergency and impulse spending. Gen Z is the most concerned about their ability to cover unexpected expenses.
A significant portion of consumers made an impulse purchase in recent months, primarily using credit cards. Many consumers used credit cards for emergency purchases and opted for installment plans to manage payments. Millennials and Gen Z are particularly leaning into flexible payment options, with 26% of millennials expecting to increase their impulse purchases in the next year.
Installment plans are appealing across generations, with 36% of non-Boomer consumers who used credit cards for impulse purchases choosing installment plans. As economic uncertainty continues, flexible payment solutions will play a critical role in helping shoppers maintain their financial well-being. Even as consumers manage emergency expenses, many made unplanned purchases last year, illustrating the tension between financial caution and spontaneous spending.
This trend suggests that while consumers are mindful of their budgets and the broader economy, they remain vulnerable to impulse buys driven by emotional triggers, limited-time deals, or social influence. For brands, this means balancing affordability and value-driven messaging with flexible payment options to meet the spontaneity of consumer spending.
Image Credits: Photo by Vlad Alexandru Popa on Pexels
