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April 30, 2025
A Growing Number of Americans Are Buying Groceries With Buy Now, Pay Later: Is This a Cause for Concern?
According to a recent LendingTree survey released on April 23, an increasing number of Americans are opting to use buy now, pay later (BNPL) services to purchase groceries. The findings covered a broad range of topics related to the buy now, pay later experience among today’s U.S. consumers, but one key area of focus was how people are using the payment method for grocery shopping.
LendingTree commissioned QuestionPro to conduct the research, which involved an online survey of 2,000 U.S. adults ages 18 to 79. That data was combined with a second survey zeroing in on BNPL habits, this time involving 2,006 American adults of the same age range.
First up: A quarter of respondents (25%) who were already BNPL users indicated that they had taken advantage of buy now, pay later loans to purchase groceries. This represents a significant uptake versus last year’s figure, which came in at 14%. Perhaps unsurprisingly, members of Gen Z were most likely to have done so (33%), which aligns with the broader trends observed throughout the report.
“Men are more likely than women (53% versus 46%) to have used a BNPL loan. Also, the younger you are, the more likely you are to have used one: 64% of Gen Zers ages 18 to 28 say they’ve used one, compared with 29% of baby boomers ages 61 to 79. That 64% includes 16% who’ve used them six or more times,” LendingTree’s Matt Schulz wrote.
However, it should be noted that a very slim majority (51%) had never engaged with a BNPL loan. While BNPL may seem “everywhere,” as a Fox59 report put it — citing NerdWallet data showing that 55% of Americans have used it at least once — the trend is largely being driven by younger consumers who are more willing to embrace the option.
One potential cause for concern: Over half of BNPL users reported paying late on at least one former buy now, pay later loan they’d taken out in the past (54%), including 41% who admitted to paying late on at least one such loan over the course of the past year. That figure rested seven points lower a year prior, at 34%.
Furthermore, according to a Federal Reserve note from December 2024, BNPL users tend to be more economically vulnerable than the average U.S. consumer, and the fact that grocery — and food delivery — purchases are now being shifted to buy now, pay later payment programs could be either representative of economic unease or an instigator toward such a scenario.
“Additionally, we show that adults who report lower overall financial well-being and those who appear liquidity or credit constrained were not only among the most likely to use BNPL, but most of these consumers also indicated that they used BNPL because it was the only way they could afford to make the purchase. In contrast, those with higher financial well-being and more financial resources were less likely to use BNPL in the first place, and those who did, typically did so to spread out payments or to avoid interest charges,” the FEDS Notes authors wrote.
Discussion Questions
Is the growing number of American consumers opting for BNPL loans to buy groceries cause for concern, more reflective of broader adoption of the payment method, or both?
What can be done to reduce the number of BNPL borrowers who are making late payments, particularly as the prevalence of the practice increases to include everyday purchases such as groceries or food delivery?
Will older generations of Americans buy into BNPL as younger U.S. consumers continue to embrace the payment option on a variety of levels? What barriers to acceptance exist for older demographics, and how might these be overcome?
Poll
Loading …BrainTrust
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
John Hennessy
Retail and Brand Technology Tailor
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
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It is a mix of both. For younger generations, BNPL is replacing traditional credit card use as getting credit is easier and it is seen as more flexible. So, some of this is just a natural switch. However, there are more people using all forms of credit to buy groceries which is, by and large, a mild indicator of financial constraint. The really revealing data comes from rising defaults, growing debt levels, and higher carry-over balances.
The concern is not so much that credit (whether BNPL or a credit card) is being used for groceries, it’s that 41% of users are paying their bills late. That is far more demonstrative of larger economic challenges forthcoming.
I’m going to go negative here…bigly: sure, it could (simply) be sophisticated buyers who know the time value of money, and realize this is no different than a credit card paid off timely (assuming, of course that’s true) Uh huh! And where is the parking for my flying pig I rode down to the store? I’m not sure “barriers for acceptance” can be overcome…and I sure as H*** dont’t want them to be!
However you describe it, BNPL is a loan. We Baby Boomers who grew up poor (let’s face it…very poor) will avoid it like the plague.I do worry about younger people not seeing the potential trap here.
This is a disturbing trend. Making installment payments on groceries—in America? Sadly, yes. For some consumers, this is the reality: relying on BNPL to cover basic expenses. Of course, many use BNPL simply for convenience, and that’s perfectly reasonable. But when it’s needed just to afford essentials, and then payments are missed, resulting in fees or penalties, the situation becomes truly problematic. Perhaps tightening credit requirements for new sign-ups might reduce late payments, though providers would likely resist anything that stunts growth. Clearly, consumer demand for BNPL services continues to grow, and their application can extend to virtually any purchase. It’s reassuring, at least, that the Fed is tracking this trend.
BNPL may provide consumers with short-term relief when they are in need of essentials, but its long-term sustainability is doubtful. People who rely on BNPL to purchase groceries may accumulate debt, especially if they are unable to pay off their balances on time.
There is a possibility that this could lead to financial strain and affect credit scores, indicating potential risks for both consumers and the economy.
By ensuring that BNPL providers perform thorough credit checks before approving transactions, stricter regulations could mitigate these risks. Moreover, setting caps on interest rates and late payment fees can prevent consumers from spiraling into unmanageable debt.
It would also empower users to make informed decisions about their financial commitments if clear and transparent terms and conditions were made mandatory.
BNPL offers the benefit of flexibility in managing financial affairs without the immediate burden of a large upfront payment for younger consumers. They can budget more effectively by spreading the cost of purchases over a number of installments, which makes it easier for them to afford necessary items without depleting their savings.
Furthermore, the convenience and accessibility of BNPL’s online platforms coincide with the digital habits of the younger generation, enhancing their shopping experience.
This is an awful trend. Simply, one should never borrow against a purchase that is used up before the loan is paid off. Groceries? I can’t think of a more risky proposition.
The likely unknown risk using BNPL services is unintended damage to credit scores. BNPL services don’t report timely payments but credit scores can be negatively impacted by failure to pay.
There’s nothing good about this. Borrowing to pay for groceries coupled with rising deliquency rates are indicative of a much larger issue with our ecomony. No wonder consumer confidence is plummeting. And, in a service driven economy that’s bouyed by consumer spending, this a negative indicator for retailers.
The increasing use of BNPL for everyday purchases like groceries is concerning. While it likely points to financial pressures, it might also suggest gap in financial literacy. It raises the question of whether it’s a shift in consumer behaviour or a response to economic challenges.
BNPL will continue to gain traction especially among Gen Z consumers and those economically stretched. With an estimated 30–60% of U.S. consumers living paycheck-to-paycheck, it’s no surprise repayment challenges are mounting, and are likely to continue.
A powerful win for BNPL lies in its flexibility. Tailoring payment plans with pay cycles and offering personalized structures isn’t just a nice-to-have, it’s a necessity. These tools enable users to manage spend more intentionally.
To address rising defaults, providers could take this offering one step further mandating payment alignment features after a missed or late payment. It’s not a silver bullet, but it’s one guardrail that benefits consumers by reducing friction, improving repayment rates, and reinforcing financial responsibility.
BNPL isn’t going anywhere, but managing its risks needs to evolve as fast as its adoption.
“I owe my soul to the company store…”
More people buying household essentials on store credit is a troubling trend. If late-payers are on the increase too, that sounds to me like a burgeoning tragedy.