November 3, 2025
As the holidays approach, wish lists grow longer, and so do the receipts. Gifts, family gatherings, travel … all the little extras add up. Most of us stretch our budgets this time of year, but with Buy Now, Pay Later (BNPL) usage forecast to grow 12% this holiday season and delinquencies on a years-long upward trend, can credit unions afford it?
The Lure of Easy Credit
Just ask your members, they’ll tell you: Prices are high and their wallets are hurting. Little wonder then that BNPL options can feel like a lifeline. Split the payments. No interest. What’s the harm?
But the practice has reached near-epidemic levels. In the U.S., BNPL users are projected to reach 91.5 million this year, up from 86.5 million in 2024 and almost double 2021 numbers.
For consumers, the frictionless checkout experience makes it easy to say yes in the moment but hard to see how much they’ve really spent. Impulse purchases are surging. But anyone juggling three or four active plans—as the typical BNPL user is these days—is at serious risk of those “small” installments stacking up.
Late payments have increased 20% in this year alone—this spells bad news for a credit union system continuing to struggle with liquidity.
Where Mission and Margin Meet
BNPL has changed how consumers spend, but it’s also exposing a widening gap credit unions are in a prime position to fill. Transactions happen instantly, but relationships and fundamental guidance are missing; this is where mission and margin meet.
Financial education, that was for so long the hook credit unions hung their hat on, has simply not kept pace with the realities of everyday finances.
Increasingly, credit unions are trying to lean into the trend (a cursory Google search of “credit union BNPL” will show you just how many have adopted the term) but with a quarter of BNPL users finding themselves overspending, is that really living up to the system’s founding principles?
A quarter of any segment struggling is an untenable volume for any FI, but for mission-driven credit unions it’s a klaxon signaling the need for alternatives—not more of the same.
Members need better budgeting advice, guidance and, realistically, digital transaction alerts from credit unions; solutions that would surely reduce delinquencies, increase deposits, and solidify member loyalty.
Why Credit Unions Should Reimagine, Not Replicate
One alternative credit unions like Missouri’s R-G FCU are using is a robust “Save Now, Buy Later” program. Sure, it may not bring the same instant gratification as its riskier alternative, but it does offer positives for both members and credit unions alike: security, control, and less financial pain in the long run.
Others are streamlining deposits to facilitate savings. PenFed recently announced a major move to offer mobile cash deposits at a range of major retailers, allowing members to make physical deposits at thousands of cash registers across the country.
By encouraging and facilitating savings, credit unions can help members plan and purchase with confidence, avoiding late fees, stacking debt, and long-term financial stresses. Isn’t that the goal?
Innovations That Drive Growth
BNPL isn’t outright flawed (everything in moderation, after all) but its grip on credit union members is an undoubted risk. It will take more than this holiday season to turn the tide, but the more credit unions lead with empathy and innovation, the more financially healthier their members—and their balance sheets—will be.