As grocery prices continue to squeeze household budgets, a growing number of Americans are turning to “buy now, pay later” loans to cover the cost of food, raising fresh concerns about consumer debt and financial vulnerability, according to a new survey.
One in four users of buy now, pay later (BNPL) services say they’ve used the short-term loans to purchase groceries, up from just 14% a year ago, according to a new LendingTree survey. The trend is most pronounced among younger Americans, with one-third of Gen Z BNPL users reporting they’ve used the loans for supermarket purchases.
“BNPL is becoming a bridge between paychecks for more people,” said Matt Schulz, LendingTree’s chief credit analyst. “Using these loans for essentials like groceries or takeout is a clear sign that many families are feeling the financial strain.”
BNPL services such as Affirm, Klarna and Afterpay allow consumers to split payments into smaller installments—often without interest if paid on time. But late payments are increasingly common. The survey found that 41% of BNPL users reported making a late payment in the past year, up from 34% the year before. Among those who paid late, 76% said they were only behind by a week or so.
“So I use my afterpay for my groceries. Sometimes, my personal things are just things that I decide that I might want for myself, because it’s easier to pay payments than it is to pay a one lump sum at one time anymore,” Vicki Elkins told News4JAX.
Even high-income borrowers aren’t immune. The survey showed that wealthier users are among the most likely to pay late or juggle multiple BNPL loans at once.
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Nearly a quarter of BNPL users said they’ve had three or more active loans at the same time, with Gen Zers and millennials being twice as likely as baby boomers to do so. Still, 40% of respondents said they’ve never had more than one BNPL loan at a time.
The appeal of using BNPL for food is growing. Sixteen percent of users said they’ve used it for takeout or restaurant delivery, and two-thirds say they’d consider it. Klarna and DoorDash recently partnered to offer BNPL for food deliveries—a move critics say could encourage more impulse spending.
Many borrowers are also misinformed about how BNPL affects their credit. The survey found that 62% of users incorrectly believe that on-time payments improve their credit score. In most cases, BNPL payments aren’t reported to credit bureaus and won’t impact credit history.
“There’s a dangerous gap between perception and reality,” Schulz said. “People are relying on these tools without fully understanding the long-term consequences.”
Overall, BNPL continues to gain popularity. Nearly half of all consumers surveyed said they’ve used a BNPL loan, with 11% saying they’ve done so at least six times. Men are more likely than women to have used them, and usage is highest among younger Americans. Nearly two-thirds of Gen Zers said they’ve used BNPL services, compared with just 29% of baby boomers.
The LendingTree survey also found that 39% of Americans are considering applying for a BNPL loan this month—a sharp increase from 31% in March. That includes more than half of millennials and nearly half of Gen Zers.
As BNPL becomes more common for everyday expenses, experts caution that the convenience may mask deeper financial stress.
“Using BNPL for non-discretionary items like food is a red flag,” Schulz said. “It suggests people aren’t just managing cash flow—they’re falling behind.”
- About 1 in 4 BNPL users (25%) use the loans to buy groceries—up from 14% last year. Among Gen Z users, one-third have done so, making groceries the fourth most common BNPL purchase for that generation, after clothing, tech, and home decor.
- 16% of BNPL users use the service for food delivery or takeout, and nearly two-thirds say they’d consider doing so in the future.
- Nearly 1 in 4 BNPL users (23%) have had three or more active BNPL loans at once. High-income earners are the most likely to report this, and Gen Zers and millennials are twice as likely as baby boomers to say the same.
- 41% of BNPL users have paid late in the past year, up from 34% a year ago. Surprisingly, high-income borrowers are among the most likely to pay late, along with men, young people and parents of young kids.
“Groceries are expensive, and have gotten to the point where I just don’t have a choice, to be honest, because most times, my orders come out to be $100 or better, and I don’t have that type of money after paying everything I need to pay,” Elkins said.
The trend of using loans to buy groceries is sounding the alarm for local organizations fighting food insecurity.
“It starts interest-free, but if you can’t make a payment, that reflects negatively,” Michelle Hughes, director of the Steps 2 Success program at Lutheran Social Services, said. “If you can’t make a payment, or you miss a payment, there’s a late fee that’s attached to it again, and that’s so that’s increasing your expense instead of reducing your expenses.”
Hughes said the Steps 2 Success program is a free program that offers one-on-one financial coaching, credit-building and career support.
“We understand why they are turning to buy now, pay later. But when they meet monthly with their financial coach, and we look at other ways, other alternatives that they can do to kind of make sure that groceries, and that is essential to make sure groceries are taken care of. Some of them are like, ‘OK, I can step away from this now,’” Hughes said.
Last year, Steps 2 Success clients raised their credit scores by 56 points and their monthly net incomes by $1,147 per month, on average.
For more information on the program, contact Stewart Miller with Lutheran Social Services at (904) 730-8256 or email stewart.miller@lssjax.org
You can learn more about Steps 2 Success here.