Gen Z Holiday Shopping Is Running on Buy Now Pay Later

Holiday spending isn't slowing down this year — it's changing shape. A new survey from PayPal finds shoppers caught between worry and the checkout button: most feel more financially squeezed heading into the holidays, yet nearly two-thirds still expect to spend the same or more than last year. The bridge between those two feelings? For a growing share of young shoppers, it's buy now pay later.

According to PayPal, 58% of Americans feel greater financial concern going into this holiday season, while 64% still expect to spend at least as much as they did last year. Shoppers aren't ignoring the pressure — they're adapting. About a third say setting and sticking to a budget is their top strategy, while others are comparing prices across stores and waiting for sales. The result is a holiday season that looks less like a spending pullback and more like a spending remix, built on earlier planning and sharper deal-hunting. You can read the full findings in PayPal's holiday shopping survey.

The planning is starting earlier, too. Nearly three in five shoppers plan to start buying before Thanksgiving, and two in five expect to begin by the end of October, with close to a third starting earlier than they did last year. Deals remain the engine: two-thirds say they're more likely to shop with a retailer that offers rewards or cash back, and a similar share would spend all their saved-up rewards on the perfect gift. For Gen Z shoppers who grew up stacking discount codes and cash-back apps, that behavior probably sounds familiar.

Buy now pay later is the season's budget tool

The survey's standout finding is how mainstream installment payments have become. More than half of consumers (55%) have used or considered BNPL, and among that group, three-quarters say they may use it for holiday purchases this year, as reported by Payments Dive. Flexibility is the draw: about six in ten value these plans for the feeling of control over their holiday budget and the ability to spread costs over time, while a similar share like being able to choose when and how they pay. See Payments Dive's coverage for the breakdown.

Installments also nudge people to buy. About 42% of respondents said they'd be more likely to make a purchase if an installment option were available, and a majority said it would help them manage the cost of a higher-value gift or presents for several people. “What's changing isn't consumers' desire to spend during the holidays, but how they're going about it,” PayPal's checkout chief Frank Keller said in the release — and according to PayPal, shoppers are taking a more intentional approach, looking for deals, rewards, and cash back to make every purchase count.

The tradeoffs behind the wish list

Gift-giving is still the priority, and shoppers are cutting elsewhere to protect it. About 39% said they'd cut back on dining out first, while roughly a third would buy gifts for fewer people or spend less on each gift. Clothing tops the planned purchase categories, followed by toys and games, then beauty and personal care. Seven in ten are even willing to visit multiple stores for the perfect gift — the hustle is real.

The appetite for installments is clearly growing. PayPal found stronger interest than in its survey last year, when half of respondents expected to use BNPL for holiday expenses. Not all installment plans are equal, though: PayPal's own Pay in 4 splits eligible purchases into four interest-free payments, while its longer Pay Monthly plans require credit approval — and as Payments Dive notes, many BNPL providers have added interest-bearing options over time. That matters for young shoppers: splitting payments only stretches a budget if every installment actually fits it.

What it means for your wallet

There's evidence the strategy can work when handled carefully. As reported by Payments Dive, Afterpay said 96% of customers who financed Black Friday and Cyber Monday purchases with its installments last year repaid on time or early. But the flip side is the spending nudge itself — when a pay-later button makes a purchase more likely, the budget tool can quietly become extra spending power. The basics still apply: map the installments against your actual paydays, watch for late fees, and remember that four small payments are still one full price. If you're already juggling balances, it's worth reading how Gen Z debt is rising faster than any generation's.

The survey, conducted by Morning Consult among 2,005 U.S. adults in early September with a margin of error of about two points, paints a clear picture of this holiday season. The takeaway for Gen Z wallets: it rewards planners, not necessarily big spenders. For more on how young shoppers are handling money, see our Gen Z money and investing coverage. Start early, stack rewards, and treat buy now pay later as a way to time your spending — because the real message underneath the data is that the money stress is real, and the shoppers winning the season are the ones spending it on purpose.