35% of Consumers Regularly Face Hundreds in Unplanned Expenses

Recent research reveals that a significant portion of consumers regularly face substantial unplanned expenses, reshaping how financial institutions must approach credit offerings and consumer flexibility.

The PYMNTS report, “Managing Unplanned Expenses: How the Pay Later Economy Fits Consumer Needs,” highlights the pervasive nature of unexpected spending among U.S. consumers.

It found that more than one-third of shoppers (35%) reported making an emergency purchase of at least $250 in the last year, while a similar share (36%) made an impulse purchase of that size in the past three months. These unplanned expenses, which by definition fall outside planned budgets, typically involve significant amounts, with a median cost of $605 for emergency purchases and $497 for impulse buys. Common categories for these expenditures include auto parts, home maintenance and repair items, and appliances, with median costs ranging from about $500 to over $2,000.

In addressing these unplanned costs, consumers demonstrate a slight preference for credit over cash. Credit cards emerge as the most common payment method, used by 35% for impulse purchases and 33% for emergency expenses.

Buy now, pay later (BNPL) services follow as an alternative, used by roughly 1 in 10 consumers for both impulse and emergency transactions. The report emphasizes that access to credit influences a shopper’s ability to manage these unexpected financial demands, indicating a strong market need for flexible credit solutions.

Installment plans, whether offered by card issuers, merchants, or third-party providers, show broad appeal, particularly among younger demographics like Gen Z and millennials, who often prefer these options over revolving balances. A critical factor driving the choice of credit cards and BNPL is the certainty of approval, especially for impulse buys.

Key data points from the report include:

Prevalence of Unplanned Purchases: 35% of consumers made an emergency purchase of at least $250 in the last year, while 36% made an impulse purchase of the same size in the last three months. The median cost for emergency purchases was $605, and for impulse purchases, it was $497.

Credit as the Preferred Payment Method: About half of all unplanned retail purchases are made using credit. Credit cards are the most common choice, used by 35% of consumers for impulse purchases and 33% for emergency purchases. BNPL is used for about 1 in 10 of these transactions.

Certainty of Approval Drives Payment Choice: For impulse purchases, 45% of BNPL users and 40% of credit card users cite knowing their payment would be approved as a key factor in their choice of payment method. BNPL demonstrates particular appeal for consumers with lower credit limits and scores, often serving as their only means to cover an expense.

Beyond these core findings, the report explores demographic variations in spending habits and financial concerns. Younger consumers, specifically Gen Z, millennials and bridge millennials, show a higher propensity to increase their impulse purchases in the coming year, driven by perceived improvements in their financial situations and stable employment. In contrast, a significant number of consumers planning to reduce impulse spending cite rising costs and inflation as their primary concern.

Over half of all consumers (53%) express concern about their ability to cover emergency expenses in 2025, with 8% indicating no capacity to cover a $400 unexpected cost, underscoring the broader financial vulnerability across segments. These insights suggest that financial institutions must continue to innovate their credit product offerings to provide flexibility and certainty, particularly for those consumers most susceptible to unexpected financial shocks.