Across the country, buy now, pay later (BNPL) loans are increasingly becoming a lifeline for Americans shopping for basic necessities like weekly groceries — with concerning consequences.
A recent LendingTree survey reveals that 25% of American BNPL users accessed these short-term installment loans for grocery purchases in the past year.
Even more concerning, approximately 2 in 5 users have missed a payment on these loans, suggesting that what began as a temporary solution is becoming a financial burden for many households.
From luxury purchases to everyday essentials
BNPL services — offered by companies like Klarna, Afterpay and Affirm — were originally designed for discretionary spending on electronics, fashion or travel. The model splits purchases into several payments over weeks, typically interest-free if paid on schedule.
But inflation and persistently high grocery prices have backed many Americans into a financial corner.
Even as overall inflation has cooled, the cost of basic staples continues climbing, stretching household budgets to breaking points. This economic pressure has transformed BNPL from a convenience for splurges into a necessity for essentials.
The trend is particularly pronounced among younger consumers, with 33% of Gen Z reporting having used BNPL for groceries.
The hidden dangers of financing food
What makes this trend particularly alarming is the fundamental mismatch between BNPL’s design and grocery shopping. Using debt to pay for items consumed within days, while repaying that debt over weeks or months, creates a dangerous disconnect between cost and consumption.
The convenience of BNPL — often just a few taps at checkout — masks serious financial implications. Many users open multiple BNPL loans simultaneously across different platforms without realizing how quickly the debt accumulates.
LendingTree found that 60% of users had multiple BNPL loans open at once.
While each individual payment might seem manageable — $25 here, $15 there — the cumulative effect can devastate a budget already strained by rent, utilities and gas.
Add in potential late fees, overdraft charges and credit-score impacts from missed payments, and the real cost becomes much higher than the sticker price on groceries.
Regulatory catch-up
Until recently, BNPL lenders operated with fewer consumer protections than traditional credit providers. Only in recent months have they been required to follow some of the same rules as credit card companies, including clearer disclosures and the right to dispute charges.
Most BNPL providers use soft credit checks or none at all, making it easier for consumers to overextend themselves across multiple platforms. This lack of comprehensive oversight means users can quickly accumulate debt beyond their means to repay.
Managing grocery expenses responsibly
For those feeling the squeeze of higher prices, BNPL services might seem like the only option for putting food on the table. If you find yourself considering this route, financial experts recommend several strategies to minimize risk:
- Stick to one BNPL provider to better track your obligations
- Set calendar reminders for payment due dates to avoid late fees
- Avoid opening multiple BNPL loans in a single pay period
- Examine your budget for other areas where cuts might be possible
For those in dire circumstances, exploring grocery assistance programs like SNAP or local food banks may provide more sustainable support than accumulating debt for essentials.
Also, building even a small buffer in a high-yield savings account can provide emergency grocery funds without resorting to loans.
A symptom of broader economic strain
The rising use of BNPL for groceries serves points to deeper systemic pressures on household finances.
As Matt Schulz, Lending Tree’s chief consumer finance analyst put it, “A lot of people are struggling and looking for ways to extend their budget.” Between inflation, high interest rates and economic uncertainty, many consumers are desperately seeking ways to make ends meet.
While BNPL loans can offer temporary breathing room, they aren’t designed as long-term solutions for basic needs. The growing reliance on financing food reflects both the ingenuity of consumers seeking solutions and the precarious financial position many Americans currently face.
Understanding this trend and its risks is crucial for consumers navigating these challenging economic times. BNPL may offer a short-term bridge, but without careful management, that bridge can quickly become a trap.
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