Additional Coverage:
- Americans in trouble after turning to pay later loans for groceries – as many are paying late (themirror.com)
Grocery Costs Pushing More Americans to Buy Now, Pay Later
A recent Lending Tree report reveals a concerning trend: more Americans are relying on buy-now, pay-later (BNPL) services to afford groceries, and a growing number are falling behind on payments. The survey of U.S. consumers aged 18-79 found nearly half use BNPL services for essential purchases, highlighting the increasing struggle to afford basic necessities amid inflation and economic uncertainty.
According to Lending Tree Chief Consumer Finance Analyst Matt Schulz, many of these consumers are just a week away from their next paycheck. He attributes the rising BNPL usage to a combination of factors, including persistent inflation, high interest rates, and economic anxieties.
“A lot of people are struggling and looking for ways to extend their budget,” Schulz explained. He cautioned, however, that while BNPL services can be a useful tool, they also carry risks.
The data shows a significant jump in the number of consumers using BNPL for groceries, rising from 14% in 2024 to 25% this year. Alarmingly, the percentage of consumers who were late on their BNPL payments last year climbed to 41%, up from 34% the previous year.
While BNPL services offer interest-free installment payments, late fees can quickly accumulate. Schulz emphasized the importance of caution, particularly as 60% of BNPL users reported holding multiple loans simultaneously, with nearly a quarter juggling three or more.
The growing reliance on BNPL extends beyond groceries. Recent reports indicate a surge in BNPL usage for concert tickets and other purchases, reflecting broader economic concerns. Schulz offered a sobering outlook, predicting the situation will likely worsen in the short term.