Black Friday 2025: Strong Sales Mask Growing Consumer Stress

Black Friday spending hit record levels in 2025, with online sales reaching $11.8 billion, up 9.1% from the prior year. Combined with in store purchases, overall retail sales climbed 4.1% according to Mastercard. But before declaring victory for consumer health, look beneath the surface. Much of this spending was financed through mounting debt obligations, and the mechanisms consumers are using to sustain their purchases reveal significant financial stress.

Buy now pay later usage surged to $762 million during Black Friday alone, part of a broader pattern where BNPL is projected to account for $20.2 billion in holiday spending from November through December, an 11% increase over 2024. This is not a sign of consumer strength. When shoppers increasingly need payment plans to afford discretionary holiday purchases, that signals budget constraints, not robust demand. The CFPB reports that more than one fifth of consumers with credit records used BNPL in 2022, with most having subprime or deep subprime credit scores. Nearly 60% admit they use BNPL to finance purchases they could not otherwise afford.

The inflation adjusted picture is worse. Salesforce data shows that while dollar spending increased, order volumes fell 1% and average selling prices climbed 7%. This means consumers bought fewer items at higher prices. With inflation running at 3%, the 4.1% nominal increase in retail sales translates to roughly 1% real growth, barely keeping pace with population expansion. The volume decline combined with elevated BNPL usage reveals consumers stretching to maintain spending levels they can no longer comfortably afford.

The concern intensifies when you examine what is happening across consumer debt more broadly. Credit card delinquency transition rates remain elevated at 8.8%, with serious delinquencies at levels not seen since 2012. Total household debt now stands at $18.04 trillion, with credit card balances hitting $1.21 trillion. More troubling, 66% of BNPL users carry multiple BNPL loans simultaneously, and BNPL borrowers hold on average $871 more in credit card debt than non users. This is not diversification of payment methods. This is debt stacking by financially stretched consumers.

The inflation and interest rate environment explains the mechanism. While headline inflation has moderated from its peak, costs for essential categories remain elevated. Grocery prices, utilities, and insurance premiums continue pressuring household budgets. Simultaneously, elevated interest rates have pushed credit card rates above 20% for many borrowers. Consumers responded by shifting to BNPL, which offers zero interest short term payment plans, but this merely delays rather than solves the affordability problem. When the BNPL bills come due in 30 to 60 days, those same consumers still face constrained budgets.

This matters for the broader economy because consumer spending represents approximately two thirds of US GDP. The holiday shopping season traditionally accounts for substantial retail activity, with the NRF projecting over $1 trillion in holiday spending for the first time. But if consumers are increasingly relying on debt financing to maintain spending levels, and if delinquency rates continue rising, the risk is a sharp pullback in consumption. The K shaped economy is evident in the data: higher income households with stock market gains and home equity are spending comfortably, while lower and middle income households are stretching to participate through BNPL and accumulating credit card balances they struggle to service.

The transmission mechanism to watch is when BNPL providers and credit card issuers tighten underwriting standards in response to rising defaults. Credit availability has expanded to riskier borrowers over the past two years, enabling spending growth. When that reverses, a significant portion of consumers who have been sustaining their purchases through debt will face reduced access to credit precisely when their financial positions are most stressed. Retailers dependent on sustained consumer spending should be preparing for weaker demand, not celebrating 2025 sales figures at face value.

The bottom line for the US economy: Black Friday’s record spending reflects consumers willing to go deeper into debt to maintain consumption, not underlying financial health. BNPL’s surge is the canary in the coal mine. When shoppers need payment plans for holiday gifts, order volumes decline despite dollar growth, and credit card delinquencies remain at post financial crisis highs, that combination does not support a bullish consumption outlook for 2026.