A rising number of Americans are turning to buy now, pay later (BNPL) loans to cover everyday expenses like groceries, according to new data from Lending Tree. The trend signals that many consumers are struggling to afford essential items amid ongoing inflation, high interest rates, and economic uncertainty. In a survey of 2,000 U.S. adults conducted in early April, about half of respondents reported using BNPL services, with 25% of them using these loans for grocery purchases. This represents a significant increase from 14% in 2024 and 21% in 2023.
The growing reliance on BNPL loans comes as more Americans are facing difficulties making timely payments. Lending Tree found that 41% of respondents had missed a BNPL payment in the past year, an increase from 34% the previous year. While most late payments were by no more than a week, the trend reflects the financial strain many consumers are under.
Matt Schulz, Lending Tree’s chief consumer finance analyst, explained that the current economic climate, marked by high inflation, elevated interest rates, and uncertainty surrounding tariffs, has led many people to find alternative ways to stretch their budgets. Schulz noted that while BNPL loans can help in the short term by splitting purchases into smaller, manageable payments, they carry risks if mismanaged, such as high fees for late payments and the potential for debt to accumulate if multiple loans are taken out simultaneously.
In fact, the survey revealed that 60% of BNPL users had multiple loans at once, with nearly a quarter holding three or more. This practice can quickly spiral into financial trouble if not carefully monitored. Schulz advised consumers to exercise caution, as BNPL loans, though interest-free, can lead to significant costs if payments are missed.
This surge in BNPL usage follows reports of other signs of economic strain. For example, a large portion of Coachella attendees used BNPL loans to fund their concert tickets, sparking debates about consumer behavior in an uncertain economy. Additionally, the recent announcement that DoorDash will accept BNPL financing for food deliveries highlights how consumers are increasingly financing even small purchases to maintain their lifestyles.
As inflation persists and the economy remains volatile, experts predict that conditions may worsen before they improve, urging consumers to tread carefully when using BNPL loans.
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