Rising Use of Buy Now, Pay Later for Groceries

A growing number of Americans are using buy now, pay later loans to buy groceries, and more people are paying those bills late, according to new Lending Tree data released Friday. The figures are the latest indicator that some consumers are cracking under the pressure of an uncertain economy and are having trouble affording essentials such as groceries as they contend with persistent inflation, high interest rates and concerns around tariffs.

The Rise of Buy Now, Pay Later Loans for Groceries

In a survey conducted April 2-3 of 2,000 U.S. consumers ages 18 to 79, around half reported having used buy now, pay later services. Of those consumers, 25% of respondents said they were using BNPL loans to buy groceries, up from 14% in 2024 and 21% in 2023, the firm said. This significant increase in the use of BNPL loans for groceries highlights the financial struggles many Americans are facing.

Late Payments on Buy Now, Pay Later Loans

Meanwhile, 41% of respondents said they made a late payment on a BNPL loan in the past year, up from 34% in the year prior, the survey found. Lending Tree’s chief consumer finance analyst, Matt Schulz, said that of those respondents who said they paid a BNPL bill late, most said it was by no more than a week or so. This suggests that while many consumers are struggling to make payments on time, they are generally able to catch up relatively quickly.

The Economic Factors Contributing to the Trend

“A lot of people are struggling and looking for ways to extend their budget,” Schulz said. “Inflation is still a problem. Interest rates are still really high. There’s a lot of uncertainty around tariffs and other economic issues, and it’s all going to add up to a lot of people looking for ways to extend their budget however they can.” These economic factors are driving consumers to seek alternative financing options, such as BNPL loans, to make ends meet.

The Risks of Buy Now, Pay Later Loans

The loans, which allow consumers to split up purchases into several smaller payments, are a popular alternative to credit cards because they often don’t charge interest. But consumers can see high fees if they pay late, and they can run into problems if they stack up multiple loans. In Lending Tree’s survey, 60% of BNPL users said they’ve had multiple loans at once, with nearly a fourth saying they have held three or more at once. This highlights the potential risks of using BNPL loans, particularly if consumers are not careful with their finances.

Conclusion

The growing trend of using buy now, pay later loans to buy groceries and the increasing number of late payments on these loans are concerning indicators of the financial struggles many Americans are facing. As the economy continues to experience uncertainty, it is essential for consumers to be cautious when using these loans and to carefully manage their finances to avoid potential pitfalls.

FAQs

Q: What is the main reason for the growing trend of using buy now, pay later loans for groceries?
A: The main reason is the financial struggles many Americans are facing due to persistent inflation, high interest rates, and concerns around tariffs.
Q: How many respondents in the Lending Tree survey reported using BNPL loans to buy groceries?
A: 25% of respondents who used BNPL services reported using them to buy groceries.
Q: What is the risk of using buy now, pay later loans?
A: The risk of using BNPL loans includes high fees if payments are late and potential problems if multiple loans are stacked up at once.
Q: What percentage of BNPL users reported having multiple loans at once?
A: 60% of BNPL users reported having multiple loans at once, with nearly a fourth saying they have held three or more at once.
Q: What is the advice for consumers using buy now, pay later loans?
A: Consumers should be cautious when using these loans and carefully manage their finances to avoid potential pitfalls.