An increasing number of Americans are turning to buy now, pay later (BNPL) loans to purchase groceries—and more are falling behind on those payments, according to new data from LendingTree released Friday.
The findings highlight mounting financial strain among consumers grappling with an uncertain economic environment, persistent inflation, high interest rates, and growing concerns over tariffs. Many are now struggling to afford basic necessities like groceries.
In a survey conducted April 2–3 among 2,000 U.S. adults ages 18 to 79, about half reported using BNPL services. Among them, 25% said they used BNPL loans to buy groceries—a noticeable rise from 14% in 2022 and 21% in 2023, according to LendingTree.
The survey also revealed that 41% of BNPL users had made at least one late payment in the past year, up from 34% the year before.
LendingTree’s chief consumer finance analyst Matt Schulz noted that most late payments were typically just a week or so overdue. “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 stretch their budgets however they can.”
“For a lot of people, that’s going to mean leaning on buy now, pay later loans—for better or worse,” he added.
While Schulz stopped short of calling the data a sign of an impending recession, he warned the financial outlook may worsen before it improves. “I do think it’s going to get worse, at least in the short term,” he said. “I don’t know that there’s a whole lot of reason to expect these numbers to get better in the near term.”
BNPL services, which allow users to split purchases into several interest-free payments, have become a popular alternative to credit cards. However, late fees can be steep, and consumers may find themselves overwhelmed if they juggle multiple BNPL loans at once. According to the survey, 60% of users said they had more than one BNPL loan at the same time, with nearly one in four holding three or more simultaneously.
“It’s just really important for people to be cautious when they use these things,” Schulz said. “Even though they can be a really good interest-free tool to help make it from one paycheck to the next, there’s also a lot of risk in mismanaging it. So people should tread lightly.”
LendingTree’s report comes on the heels of a Billboard article revealing that around 60% of general admission Coachella ticket buyers used BNPL to pay for their passes—fueling debate over the state of the economy and Americans’ growing reliance on debt to sustain their lifestyles. Similarly, DoorDash recently announced it would accept Klarna’s BNPL option for food deliveries, prompting widespread commentary and jokes about Americans now needing financing for fast food.
In recent years, consumers had managed to weather inflation and rate hikes thanks to a strong labor market and rising wages, at least for many. But that resilience may be fading. Earlier this year, major companies like Walmart and Delta Airlines warned of weakening demand, leading to lower-than-expected sales forecasts and new signs of strain in consumer spending.
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