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A Walmart in Rosemead, California, saw shoppers purchasing groceries on April 11, 2025.
A recent report from Lending Tree indicates a notable rise in Americans using buy now, pay later (BNPL) loans for grocery purchases, with an increase in late payments being reported as well. This shift highlights the financial pressures many consumers are facing in an unpredictable economy characterized by ongoing inflation and elevated interest rates.
According to a survey carried out from April 2-3 among 2,000 Americans aged 18 to 79, around half disclosed that they have utilized BNPL services. Specifically, 25% of these consumers reported using such loans for groceries, a significant rise from 14% in 2024 and 21% in 2023.
The data also revealed rising payment difficulties, with 41% admitting they have made late payments on BNPL loans over the past year, compared to 34% the previous year.
Matt Schulz, Lending Tree’s chief consumer finance analyst, noted that most respondents who reported late payments did so by a week or less. “Many people are grappling with financial strain and exploring ways to stretch their budgets,” he explained. “With inflation persistent and interest rates remaining high, there’s considerable uncertainty regarding economic factors such as tariffs. This predicament is prompting consumers to turn to BNPL services.”
Schulz refrained from labeling these trends as signs of a recession but warned that the economic situation may worsen before it improves. “I expect conditions to deteriorate in the short term, without much indication that things will get better soon,” he added.
BNPL loans, which enable consumers to break down purchases into smaller payments, have become an appealing alternative to credit cards due to their often interest-free nature. However, late payments can incur significant fees, and managing multiple loans can lead to financial challenges. The survey found that 60% of BNPL users had multiple loans simultaneously, with nearly a quarter managing three or more at once.
“It’s crucial for users to exercise caution,” Schulz advised. “While these loans can serve as a useful tool to bridge financial gaps, they come with risks when mismanaged. Caution is advisable.”
This report arrives in the wake of findings from Billboard indicating that around 60% of attendees at Coachella financed their tickets through BNPL loans, triggering discussions about consumer borrowing and economic health. Additionally, DoorDash’s recent announcement about accepting BNPL financing for food deliveries sparked humor online, with critiques regarding Americans financing everyday meals.
Historically, despite the ongoing inflation and high-interest rates, consumers have managed to navigate economic pressures relatively well due to a robust job market and wage growth that kept pace for some workers. However, several large companies, including Walmart and Delta Airlines, recently indicated that they were witnessing a decline in demand, leading to disappointing sales forecasts and raising concerns about shifting consumer behavior.
Source
www.cnbc.com