One in Seven Americans Use Buy Now Pay Later for Groceries in 2025 as Late Payments Hit 41%

The increasing reliance on buy-now-pay-later (BNPL) services for everyday essentials such as groceries signals deeper economic pressures facing American households. Recent surveys indicate that approximately one in seven Americans has turned to platforms like Klarna, Affirm, and Afterpay to finance food purchases, a trend that underscores the strain of persistent inflation and rising living costs. This shift not only highlights vulnerabilities in consumer spending power but also raises questions about the sustainability of such financing models in a high-interest-rate environment.

The Rise of BNPL for Essentials

Buy-now-pay-later services, which allow consumers to split purchases into interest-free instalments, have traditionally been associated with discretionary spending on items like electronics or fashion. However, data from various financial surveys paint a concerning picture of their expanding role in funding necessities. For instance, a LendingTree report from April 2025 revealed that 25% of Americans are using BNPL for groceries, up from 14% the previous year. This escalation reflects broader economic challenges, including food inflation that has hovered around 4% annually in recent years, following a sharper 11% spike between 2021 and 2022.

The appeal of BNPL lies in its accessibility: no credit checks for many plans, quick approvals, and the illusion of affordability through deferred payments. Yet, this convenience comes at a cost. More than 40% of BNPL users reported making a late payment in the past year, according to the same LendingTree data, an increase from 34% in 2024. Such delinquencies can lead to fees that exacerbate financial strain, particularly for lower-income households already grappling with elevated costs for housing, utilities, and transportation.

Economic Implications and Consumer Behaviour

This trend towards financing groceries via BNPL is symptomatic of a broader squeeze on disposable income. With U.S. credit card debt surpassing $1.12 trillion as of mid-2025, per reports from financial analysts, the addition of BNPL obligations could amplify delinquency rates. A Forbes article from April 2025 noted that Americans are increasingly using these loans for groceries amid high costs, with a growing number also falling behind on repayments. This behaviour suggests a form of “stressflation,” where the mental and financial toll of inflation drives reliance on short-term credit solutions.

Younger demographics appear particularly affected. Surveys show that about 4 in 10 Americans under 45 have used BNPL for essentials like groceries or restaurant meals. This generational shift may stem from stagnant wage growth relative to living expenses, coupled with a familiarity with digital payment tools. However, financial experts warn of the risks: unlike traditional credit cards, BNPL often lacks robust consumer protections, and missed payments can indirectly impact credit scores under new FICO guidelines introduced in 2025.

• BNPL usage for groceries has surged by 43% year-over-year, according to some spending surveys.
• Delinquency rates on these plans are climbing, with 41% of users reporting late payments in the past year.
• Overall, 22% of consumers use BNPL monthly, even among those satisfied with traditional credit cards.

Impact on BNPL Providers

For companies like Affirm, Klarna, and Afterpay (a subsidiary of Block, formerly Square), the pivot to essential purchases represents both opportunity and risk. On one hand, groceries offer a high-frequency, low-value transaction category that could drive volume growth. Analyst models from firms like Bankrate project that BNPL market penetration could reach 30% of U.S. e-commerce by 2027, fuelled partly by everyday spending. This expansion might bolster revenue streams, with groceries accounting for up to 25% of BNPL usage and 40% of related revenues in some estimates.

Yet, the risks are mounting. Higher delinquency rates could lead to increased provisions for bad debts, squeezing margins. Regulatory scrutiny is intensifying, with calls for BNPL to be treated more like traditional credit products. In a scenario modelled by independent analysts, a sustained economic downturn could see default rates on BNPL loans rise to 10–15% by 2026, compared to current levels around 5–7%. Sentiment from credible sources, such as Bankrate’s senior industry analyst Ted Rossman, labels BNPL as a double-edged sword—convenient but potentially predatory for vulnerable users.

Broader Market and Policy Considerations

The phenomenon of BNPL-financed groceries intersects with wider economic narratives. Persistent inflation, though cooling from its 2022 peaks, continues to erode purchasing power. The U.S. Federal Reserve’s rate hikes, which peaked at 5.25–5.50% in 2023, have made traditional borrowing costlier, pushing consumers towards seemingly cheaper alternatives like BNPL. However, as a CNBC report from April 2025 highlighted, this could be a false economy, with users facing hidden fees and debt accumulation.

From a policy standpoint, there is growing advocacy for better oversight. Financial influencers and experts, as noted in Fox Business coverage from August 2025, describe BNPL as a “dangerous trap” for young Americans, akin to payday loans. This sentiment is echoed in opinion pieces, such as one from Fox News in July 2025, which warns of BNPL contributing to the national debt crisis. Regulators may impose stricter disclosure requirements, potentially curbing growth but enhancing consumer protection.

Looking Ahead: Forecasts and Strategies

Analyst-led forecasts suggest BNPL adoption for essentials could stabilise at 20–25% of users by 2026, assuming moderate economic recovery. In a more pessimistic model from LendingTree, if food prices rise another 5% annually, usage might climb to one in five Americans, heightening default risks. Investors eyeing BNPL stocks should monitor delinquency trends closely; a spike could pressure valuations, while successful risk management might yield outperformance.

In essence, the growing use of BNPL for groceries is a barometer of economic health—or the lack thereof. It invites a reevaluation of consumer resilience and the role of fintech in everyday finance. While these services provide short-term relief, their long-term implications for household debt and economic stability warrant careful scrutiny. Dry humour aside, financing one’s weekly shop on credit might keep the wolf from the door today, but it could invite a pack tomorrow.

References

• CNBC. (2025, April 26). Americans turn to buy-now-pay-later loans for groceries. https://www.cnbc.com/2025/04/26/americans-groceries-buy-now-pay-later-loans.html
• Forbes. (2025, April 28). American consumers turn to buy-now-pay-later for groceries as high costs bite. https://www.forbes.com/sites/markfaithfull/2025/04/28/american-consumers-turn-to-buy-now-pay-later-for-groceries-as-high-costs-bite/
• Fox Business. (2025, August). Buy-now-pay-later services labelled “dangerous trap” for young Americans. https://www.foxbusiness.com/media/buy-now-pay-later-services-dangerous-trap-young-americans-financial-expert-warns
• Fox News. (2025, July). BNPL: the worst thing for consumers since payday loans. https://foxnews.com/opinion/buy-now-pay-later-worst-thing-consumers-since-payday-loans
• LendingTree. (2025). Buy-now-pay-later loan statistics. https://www.lendingtree.com/personal/buy-now-pay-later-loan-statistics/
• RetailWire. Buying groceries with buy-now-pay-later. https://retailwire.com/discussion/buying-groceries-buy-now-pay-later/
• Fortune. Buying groceries with BNPL—economic concerns amid LendingTree data. https://fortune.com/article/buy-now-pay-later-groceries-economic-concerns-lending-tree-survey/
• Nasdaq. Buy-now-pay-later services for grocery shopping. https://www.nasdaq.com/articles/4-buy-now-pay-later-services-you-can-use-buy-groceries
• Nasdaq. BNPL tools for grocery spending. https://www.nasdaq.com/articles/5-buy-now-pay-later-services-you-can-use-to-buy-groceries
• CBS News. The upsides and risks of buy-now-pay-later. https://cbsnews.com/video/upsides-risks-buy-now-pay-later-services
• WDBJ7. (2025, August 21). How consumers use buy-now-pay-later services. https://wdbj7.com/2025/08/21/see-how-use-buy-now-pay-later-services
• 929ZZU. (2025, August 18). BNPL services and credit scores under new FICO guidelines. https://929zzu.com/2025/08/18/buy-now-pay-later-services-impact-credit-scores-under-new-fico-changes/
• ABC30. Expert advice on buy-now-pay-later pitfalls. https://abc30.com/post/watching-wallet-expert-advice-buy-now-pay-later/17597739/
• Fox40. Managing BNPL loans responsibly. https://fox40.com/news/national-and-world-news/how-to-manage-your-buy-now-pay-later-loans/amp
• X (formerly Twitter): Selected accounts and expert commentary sourced from @unusual_whales, @NewsWire_US, @zerohedge, @JackPosobiec, @MorePerfectUS, @AndrewTeal, @Debt.com, @TonyDOnofrio, @4NewsNow, @channel3000, @KLTV7