Managing Unplanned Expenses: Key Insights & Trends for 2025
Unplanned expenses are a fact of life. Whether it’s a car breaking down or a pipe bursting at home, most consumers will face unexpected costs at some point—and how they handle them is rapidly evolving.
Our latest report with PYMNTS, “How Consumers Manage Unplanned Expenses,” offers a detailed look at how shoppers are financing these surprise purchases—and what it means for businesses in 2025 and beyond.
Unplanned Purchases Are Common—But Financially Straining
In 2024, 50% of consumers made unplanned purchases, yet more than half—53%—are worried about how they’ll afford unexpected expenses in 2025.
The most common emergencies?
- Auto repairs (42.9%)
- Home repairs (34.3%)
Of these, home repairs are the costliest, with a median spend of $2,112.
When it comes to covering these costs, many turn to credit:
- 38% of Baby Boomers and 31% of parents used credit cards.
- Just 9.4% used traditional Buy Now, Pay Later (BNPL) options.
Credit Accessibility Shapes Behavior
Consumers with strong credit are 1.5x more likely to finance unplanned purchases. But those with lower credit scores often forgo the purchase entirely rather than seek alternative funding.
This signals a critical gap—and opportunity—in how financing solutions are positioned to consumers.
Credit Cards Still Dominate, but Installments Are Gaining Ground
For purchases over $250:
- 33% of shoppers reach for credit cards.
- Of those, 30% are now using card-linked installment payments—a trend that’s gaining traction, particularly among younger consumers.
Installment plans linked to existing credit cards are emerging as a preferred choice for consumers seeking budget control without new credit applications. While BNPL remains popular for lower-credit consumers looking for fast, flexible options.
Economic Pressures Fuel Smarter Spending
As inflation continues to shape spending habits:
- Millennials and Gen Z are planning to increase impulse spending in 2025.
- Older generations are focusing on paying down debt quickly.
Across all demographics, consumers are becoming more strategic about financing, favoring options that minimize risk and complexity—especially those tied to credit they already have.
What This Means for Businesses
Consumers are no longer just looking for ways to pay—they’re looking for ways to pay smarter. Flexible financing solutions tied to existing credit lines, like card-linked installments, are becoming a must-have.
By giving customers a way to split purchases into manageable payments—without opening a new credit account—businesses can:
- Improve conversion rates
- Reduce cart abandonment
- Build long-term customer loyalty
Splitit’s card-linked installment solution does exactly that. Want to see how it can work for your business? Get in touch
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