Credit card and buy now, pay later use is approaching record levels, underscoring how stretched households are turning to short-term borrowing to keep spending going even as rates stay elevated.
Consumer Credit Stress Lifts BNPL, Pressures Card Issuers
That matters because consumer credit is still doing a lot of the heavy lifting for U.S. demand. When shoppers rely more on revolving balances and installment plans, it can prop up transactions in the near term, but it also raises the risk of higher delinquencies, charge-offs and reserve builds later if employment softens or spending slows.
For lenders and payments companies, the split is immediate. American Express, Visa and Mastercard all sit closer to the center of the payment flow, while Affirm and other BNPL providers benefit from consumers seeking smaller, more manageable payments. But the same trend can also increase credit losses and pressure underwriting standards if borrowers start using multiple forms of credit at once.
American Express’s latest filing points to a consumer that is still spending, but with more caution under the surface. The company said future credit performance will depend in part on unemployment, GDP and macro conditions, while also flagging competition from fintech firms and acquisitions as it rolls out new products in 2026.
The market has been treating the space as a barometer of consumer health. American Express shares fell 2.9% in the latest session to $340.84, Visa slipped 0.5% to $351.60 and Mastercard dropped 0.4% to $530.29, with all three pulling back after recent runs. Technically, American Express is now below its 50-day moving average, while Visa remains above both its 50-day and 200-day averages and Mastercard continues to trade above both, suggesting investors still see stronger momentum in the network names than in the premium-card issuer.
Affirm has also shown how quickly demand can shift toward installment credit when consumers want flexibility. The company said active-user engagement is rising, including on its card product, reinforcing the view that BNPL is no longer a niche checkout feature but part of the broader consumer-credit mix.
The key question for investors is how long households can keep leaning on these products without a deterioration in repayment trends. The next read-through will come from upcoming earnings and any fresh data on delinquencies, charge-offs and lending standards across card issuers, BNPL providers and payment networks.
| Entity | Gains | Losses |
|---|---|---|
| Consumers using BNPL/credit cards | ▲Short-term spending flexibility | ▼Higher debt burdens |
| Affirm and BNPL lenders | ▲More transaction volume | ▼Greater credit risk |
| Visa/Mastercard | ▲Higher payment volumes | ▼Pressure if consumer stress deepens |
| American Express | ▲Spending remains resilient | ▼Delinquency and reserve risk |
