Consumers spent a whopping $222.1 billion online during the holiday season as usage of flexible spending options hit an all-time high, according to new data from Adobe.
The figure, up 4.9% year over year, marks a new record for online shopping throughout the holiday season, which spans from Nov. 1 through Dec. 31., according to Adobe's holiday spending report published Thursday.
Adobe noted that the boost in spending was driven in large part by such heavy reliance on "buy now, pay later" (BNPL) options, which allow consumers to pay in installments, often interest-free.
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The payment option accounted for $16.6 billion in online spending, up 14% on an annual basis, during the season, underscoring how Americans were trying to manage their debt obligations amid persisting inflation, high interest rates and resumed student loan payments.
Throughout November, the payment option accounted for about $9.2 billion of the $123.5 billion spent. That's up 17.5% year over year, according to Adobe.
Cyber Monday was the biggest day of BNPL transactions overall, accounting for $940 million in spending, up 42.5% year over year.
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Usage of the payment method surged before the holiday season. From Jan 1. to Dec. 31, 2023, it accounted for $75 billion in online spending, about $9.4 billion more than the prior year.
Adobe Digital Insights lead analyst Vivek Pandya said that companies took advantage of flexible payment methods to pull in shoppers amid the uncertain economy.
And while it was effective, driving record spending online during both Cyber Monday and Black Friday, certain industry experts have drawn concern about how much consumers have been leaning on this method.
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Bankrate senior industry analyst Ted Rossman previously told FOX Business that he was concerned about the debt that will pile up on consumers after the holiday season.
This uptick in BNPL suggests that "a lot of people are close to the edge," and it's one reason why Rossman believes the "holiday debt hangover could be particularly nasty this year."
"I think the substantial surge in BNPL usage (on top of already explosive growth in recent years) shows how many people are looking for quick, affordable financing," he said.
Financial experts are especially worried about whether consumers are overusing these services, and digging themselves deeper into debt.
Those concerns come as total household debt reached $17.29 trillion in the third quarter of 2023, according to the New York Federal Reserve's latest quarterly report on household debt and credit.
