MW Americans just spent a record $20 billion with buy-now-pay-later. Here's what to do if you overdid it.
By Genna Contino
5 tips for getting your debt under control in 2026
Shoppers spent a record $20 billion using buy-now-pay-later loans over the holidays. The option is now routinely offered to shoppers, making it easy to stack up multiple loans that can become financially overwhelming.
The chaotic holiday shopping shuffle may be over, but for many people, "buy-now-pay-later" has become "buy-then-pay-now."
As 2026 gets underway, some consumers are facing overwhelming debt. This is especially true for those who took out multiple buy-now-pay-later loans to cover their holiday shopping, a move known as "stacking."
And more people are using the loans than ever before. Shoppers used buy-now-pay-later to spend a record $20 billion between Nov. 1 and Dec. 31, according to Adobe's 2025 holiday shopping trends report - a 9.8% increase from 2024.
Buy-now-pay-later typically comes in the form of "pay-in-four" loans that don't charge traditional interest, although late fees can be charged if a payment is missed. Lenders say the option expands access to people who are underserved by traditional credit, but critics say it can lead to worrisome debt accumulation.
Read more: Americans are starting the new year with record debt. Here's how they can get it under control.
Buy-now-pay-later is solidifying itself as a mainstream payment method at a time when Americans already have a record amount of debt. But experts say the specific debt-spiral danger of these loans stems from how easy it is to stack them. It's now common for online retailers to offer a buy-now-pay-later option when shoppers are about to click the purchase button. It's easy to open up several such accounts from different lenders within a matter of minutes, and they may not show up on a person's credit report, said Bruce McClary, senior vice president of membership and media relations at the National Foundation for Credit Counseling.
"Loan stacking is the flashing red light. That's when things are getting critical," said McClary, who has nearly 30 years of experience in nonprofit credit counseling. How do you know if you're headed toward harmful stacking? If you're having a hard time keeping track of all of your buy-now-pay-later loans, and you don't know off the top of your head how much you owe each month, you could be in trouble.
If this situation sounds familiar, it's time to make a plan to pay down your debt. Here are five steps to get back on track.
1. Assess the damage
Before you can make a plan to repay your buy-now-pay-later debt, you have to know how much you owe and when it's due. If you have stacked loans from different lenders, log in to each provider portal and create a master spreadsheet of your total balances, due dates and remaining payments. Search "order confirmed" in your email inbox to make sure you're not missing anything.
See also: 'We fear people will end up in financial trouble': Americans will spend a record $20 billion via buy-now-pay-later during the holidays.
It's also important to not make any new buy-now-pay-later purchases and to set up autopay on outstanding loans to avoid late fees, said Joe Piszczor, founder of Washington Family Wealth in Washington, Penn.
"The first step is to stop the bleeding," Piszczor said.
2. Solidify a repayment plan
Once you know exactly how much you owe, it's time to make a detailed plan for paying everything off.
"Level 1 priority" should be any plans that charge deferred interest, said Josh Brooks, founder of Texas-based Exponential Advisors. These specific loans, often for larger purchases such as furniture, offer 0% interest only if they're paid in full by a specific date.
"If you miss that date by $1, you may be charged retroactive interest on the original amount," Brooks said.
From there, turn to any small balances that are easy to pay off. This can help "shrink the number of active plans and makes things feel manageable again," said Joon Um, a certified financial planner at Secure Tax & Accounting in Hayward, Calif.
3. If payments are unwieldy, consolidate
For people with five or more outstanding loans, figuring out how to prioritize payments can feel overwhelming.
"If you have eight active loans, you have 32 autodrafts hitting your account in a month," Brooks said. "This causes overdraft fees."
One way to simplify things is to take out a consolidation loan, turning lots of smaller, more frequent payments into one payment on a simpler schedule. But McClary says you should only do this if the interest rate on the debt-consolidation loan is lower than the penalties you're currently facing on the buy-now-pay-later plans.
"Look at the total cost if you were to just continue paying" your buy-now-pay-later loans, McClary said. "If your credit score is healthy and you can qualify for a consolidation loan and a low interest rate, if that can save you money because it's a lower interest rate than what you're currently paying ... then it would make sense."
These loans can also be helpful if you're in the process of building up your credit, because buy-now-pay-later companies historically have not reported users' payment activity to credit bureaus.
"The timely repayment of a consolidation loan that reports to your credit bureau is more beneficial to you in that area than an invisible batch of buy-now-pay-later accounts," McClary said.
Another option is to pay off the loans with a credit card that offers 0% interest during an introductory period, which is usually 12 to 15 months. You can use the card to pay off all the microloans, giving yourself some breathing room without the immediate threat of retroactive interest.
Keep in mind that to qualify for a card with a 0% introductory APR, you'll typically need to have good to excellent credit. A "good" credit score ranges from 670 to 739, according to Experian (UK:EXPN), while "very good" credit starts at 740 and an "excellent" score is anything above 800.
4. Ask for help early
If you know that you are going to struggle to make on-time payments, let your loan provider know as soon as possible.
Afterpay $(XYZ)$ offers hardship relief through waived late fees and adjusted payment schedules. Klarna $(KLAR)$ has special repayment plans for people experiencing hardship, and Affirm (AFRM) has an option to contact its support desk if you need help repaying a loan.
From the archives (September 2025): Klarna goes public as more people say buy-now-pay-later is the only way they can afford to buy things
McClary said the borrowers who find themselves in sticky situations with buy-now-pay-later loans remind him of people who stacked payday loans before they became federally regulated in 2010. "Where people were successful in turning things around was when people reached out for help quickly and didn't let things get worse by not taking any action," he said.
If you think you're going to miss a payment or two, call your buy-now-pay-later provider before that happens and see what your options are. While buy-now-pay-later activity doesn't typically show up on your credit report, that can change if the balance is neglected and sent to a collection agency.
"It's invisible until you slip up, and then it becomes visible," McClary said. "When that thing goes to a collection agency, it becomes a big problem for your credit score and your credit report."
5. Unlink payment methods from buy-now-pay-later apps and move on
To avoid getting into this situation again, Brooks recommends unlinking your payment details from all buy-now-pay-later apps. Manually entering payment details for every transaction removes some of the convenience of online shopping, forcing you to take a moment to ask yourself if you really need what you're about to buy - and if you can afford it.
Read more: You told us your financial New Year's resolutions. Here's how to make them happen.
To truly move forward, you must "address the habit, not just the balance," Piszczor said. Putting together a written spending plan with clear guardrails around discretionary purchases and building up an emergency fund can put you in a better position in which buy-now-pay-later is no longer a default financing tool.
"BNPL isn't evil," Um said. "But without guardrails, it can quietly spiral."
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-Genna Contino
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January 08, 2026 16:22 ET (21:22 GMT)
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