August 3, 2026
przemekklos/Depositphotos.com
As BNPL Loans for Essentials (Including Groceries) Soar, Is This a Sign of Stress or Consumer Adoption?
Buy now, pay later loans are increasingly becoming a fixture of the retail business and beyond, according to a recent CNBC report penned by Stephanie Dhue and Sharon Epperson.
“Buy now, pay later services have been on the rise as more consumers look to short-term installment financing options to help them manage the rising costs of daily necessities, not just pay for discretionary purchases,” Dhue and Epperson wrote.
“BNPL providers originated nearly $157 billion in consumer credit products in 2025, up from nearly $116 billion in 2024, according to Federal Reserve estimates,” they added.
Other notable facts pulled from the report include:
- Nearly half of Americans plan a BNPL loan in the coming months: LendingTree data suggested that 44% of respondents were looking to take out a BNPL loan sometime within the next six months, with 13% of those surveyed planning to apply for three or more during that same timeframe.
- Just under one-third of U.S. BNPL users have utilized funds for groceries: A full 29% of American BNPL users have gone ahead and used said funds to procure groceries, per LendingTree data — a figure which has more than doubled since 2024, when the statistic stood at just 14%.
- BNPL delinquency rates are also increasing: The same data suggests that approximately half of BNPL borrowers (47%) have paid late on a loan at some point in the last 12 months, with that figure being substantially higher than the 34% who said the same two years ago.
- Interest-bearing BNPL loans are increasingly common: This year, interest-bearing BNPL installment loans represented more than one-third (~37%) of total BNPL loan issuances, nearly double the share observed just five years ago in 2021. Late payment fees can hit $7-8 per payment, and interest plus financing fees can reach 36%, according to Protect Borrowers.
- Credit card debt remains very high: U.S. total credit card debt hit $1.25 trillion in Q1 2026, ticking upward by 5.9% YoY according to Federal Reserve Bank of New York figures.
BNPL: Natural Adoption by Consumers and Retailers, or Last Resort for Stressed American Budgets?
But is it entirely fair to correlate the growth or adoption of BNPL loans among both U.S. consumers and retailers as necessarily a net negative, resulting from persistent inflationary pressure and general cost-of-living concerns?
Dhue and Epperson profiled full-time paraeducator and part-time radiology assistant Ashley Reed, who has been a frequently BNPL borrower for approximately two years. Following a medical emergency involving her mother while vacationing, Reed maxed out her credit cards and has been availing of BNPL services to make ends meet in the interim.
“That can make a small loan turn into something that looks more like a payday loan,” said Protect Borrowers executive director Mike Pierce. “It’s the equivalent of an interest rate of 100% APR or more because you have these late fees that stack on top of each other.”
And as for Reed, “She’s one of a growing number of consumers doing so amid inflation and other price pressures, such as higher gas prices stemming from the U.S. war with Iran,” the reporters stated.
On the other hand, industry experts suggest that BNPL is a vital tool able to be leveraged by savvy consumers within the context of an ongoing affordability concern.
“Consumers are increasingly choosing the flexibility that pay-over-time options with clear, transparent terms provide,” American Fintech Council CEO Phil Goldfeder said, per CNBC.
“Splitting the cost of a purchase into four installments with zero to low interest is smart money management, not financial risk,” wrote Miranda Margowsky, a spokesperson for the Financial Technology Association.
BrainTrust
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Tanya Thorson
Revenue & Customer Growth Leader, StrategiX Marketing
Jeff Sward
Founding Partner, Merchandising Metrics
Recent Discussions
Discussion Questions
Do you believe that the sharp spike in BNPL usage by consumers reflects desperation, adoption, or a bit of both? Why?
In your opinion, will BNPL terms trend toward favoring the consumer or the lender in terms of retail purchases? Why do you think so?
Will BNPL become a commonplace payment option in the grocery segment more specifically in the years to come? What benefits / drawbacks do you foresee?
Poll
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We monitor this on our monthly consumer panel and, broadly, there has been an increase in the use of credit to pay for groceries. So far this year, 68% of consumers have used credit cards to buy food. This is up from 63% in 2025. Most do this to get points or rewards, and about 52% pay off the balance in full each month (down from 56% last year). Only 7% fail to make the subsequent minimum payment on time. Buy now pay later is a newer option, and 13% have used this for grocery so far this year. It is much less common to get rewards for this kind of payment, so the driver of using it is mostly to ease financial pressures, force of habit, or convenience. Soft default rates (failing to make the minimum payment in time) are far higher – running at about 28%. So yes, on the surface this probably signals *some* financial distress, but not universally so. Especially so as some younger consumers are using BNPL instead of credit cards, which is unrelated to financial pressures.
Considering I can buy pretty much anything from a Boss suit, to a Lego kit to a $20 meal, none of this is surprising. The naysayers, of course, say – as they have for the past 7 years – it is a cliff.
The rise in BNPL usage reflects both consumer demand and, for some households, financial pressure. Regardless of the motivation, the fact is BNPL fills a consumer need for payment flexibility, and it behooves companies to offer it where it makes sense. I think it’s inaccurate to suggest that BNPL is somehow a nefarious service designed to trap consumers, no more than credit cards or other forms of lending are. As BNPL gains even wider adoption, including in categories like grocery that have historically not offered it, consumers will come to expect it, encouraging even more companies to make it available.
“Nefarious” is a strong word…but I don’t object to it.
Let’s not quibble on the details: whatver the reason it is NOT a good thing.
Both acceptance and difficulty can be equally true. BNPL adoption is relatively equal across all income brackets, so it isn’t purely an “I can’t afford it” story. Yet late payments and defaults have nearly doubled, loans are for increasingly smaller purchase amounts, and over 60% of users have multiple BNPL loans going simultaneously, all of which tell a sadder story. And while adoption appears to be gaining traction, regulatory protections were rolled back in 2025. Maybe the bigger question should be to the industry. Is it algorithmically offering BNPL disproportionately to users whose data profile already suggests financial fragility?
If I am providing BNPL loans, I surely want to attract those experiencing financial fragility. The interest rates are great for me, but the late fees are the icing on the cake. Love those late fees.
Sad but true. The de-regulation is especially troubling, given the continued economic squeeze projected for this demographic for the foreseeable future.
The spike reflects adoption and financial pressure, but grocery usage is the signal retailers should watch most closely.
Some consumers, especially younger shoppers, use BNPL instead of a credit card. Others use it to stretch a household budget far enough to cover food. Convenience can turn into financial strain before the next grocery trip.
Retailers need to look beyond the conversion. A sale today loses value when the payment experience weakens trust, reduces future spending, or makes it harder for the customer to return next week.
BNPL will become more common in grocery as affordability pressure grows. Clear terms, responsible limits, and full cost visibility are essential.
The weekly grocery run should not become a monthly debt cycle.
The simple sales pitch and the simple use case make total sense. Installment payments create access and affordability where it might not exist otherwise. Painless and efficient. Outstanding. Now…zoom out. What may have started as efficient adoption is morphing into a contributing factor to a credit default problem. It’s impossible to read how the article describes the changing dynamics of the last several years and conclude ‘no problem’. Rising credit balances and rising default rates are signals. Let’s pay attention.
The big headlines are often about the Federal Debt. While concerning, there are solutions.
There are no solutions to BNPL (and extended credit card debt trends for users) other than massive default. This is truly dominoes waiting to fall.
BNPL growth reflects both adoption and financial stress. Its use for groceries deserves particular attention because groceries are purchased repeatedly. A consumer could still be paying for several earlier baskets when the next one is purchased.
BNPL may become commonplace in grocery because it offers immediate flexibility. But it does not make the basket more affordable. When it is used repeatedly, a routine household expense can become rolling debt. Interest and late fees increase that risk.
The real test is not how many customers adopt BNPL. It is whether they could have paid for the groceries without it. If they could not, BNPL may be masking a continuing cash-flow shortage rather than solving one.
Yes, loans, no matter what kind, should never outlast the product that they are borrowed against.
There’s really no good news here. American families are stretched, and for lower-income families it’s going to get worse as health care costs soar and they lose insurance. Looking at Neil’s comment that 28% of these loans are seeing some level of default is a significant indicator in my opinion.
Bottom line, as Craig states- whatever the reason- this isn’t indicative of anything great.
BNPL providers claim growth reflects consumer preference while 47% of borrowers pay late and grocery usage doubles in a single year. Follow the incentive structure: retailers get paid upfront by BNPL providers and carry zero repayment risk. They have no reason to question whether the customer should be financing Tuesday’s groceries over four installments. The product is consumed before the first payment is due. That is not payment flexibility. It is household deficit spending with a consumer-friendly interface. When financing outlasts the shelf life of what was financed, the system is extracting value, not creating it.
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We monitor this on our monthly consumer panel and, broadly, there has been an increase in the use of credit to pay for groceries. So far this year, 68% of consumers have used credit cards to buy food. This is up from 63% in 2025. Most do this to get points or rewards, and about 52% pay off the balance in full each month (down from 56% last year). Only 7% fail to make the subsequent minimum payment on time. Buy now pay later is a newer option, and 13% have used this for grocery so far this year. It is much less common to get rewards for this kind of payment, so the driver of using it is mostly to ease financial pressures, force of habit, or convenience. Soft default rates (failing to make the minimum payment in time) are far higher – running at about 28%. So yes, on the surface this probably signals *some* financial distress, but not universally so. Especially so as some younger consumers are using BNPL instead of credit cards, which is unrelated to financial pressures.
Considering I can buy pretty much anything from a Boss suit, to a Lego kit to a $20 meal, none of this is surprising. The naysayers, of course, say – as they have for the past 7 years – it is a cliff.
The rise in BNPL usage reflects both consumer demand and, for some households, financial pressure. Regardless of the motivation, the fact is BNPL fills a consumer need for payment flexibility, and it behooves companies to offer it where it makes sense. I think it’s inaccurate to suggest that BNPL is somehow a nefarious service designed to trap consumers, no more than credit cards or other forms of lending are. As BNPL gains even wider adoption, including in categories like grocery that have historically not offered it, consumers will come to expect it, encouraging even more companies to make it available.
“Nefarious” is a strong word…but I don’t object to it.
Let’s not quibble on the details: whatver the reason it is NOT a good thing.
Both acceptance and difficulty can be equally true. BNPL adoption is relatively equal across all income brackets, so it isn’t purely an “I can’t afford it” story. Yet late payments and defaults have nearly doubled, loans are for increasingly smaller purchase amounts, and over 60% of users have multiple BNPL loans going simultaneously, all of which tell a sadder story. And while adoption appears to be gaining traction, regulatory protections were rolled back in 2025. Maybe the bigger question should be to the industry. Is it algorithmically offering BNPL disproportionately to users whose data profile already suggests financial fragility?
If I am providing BNPL loans, I surely want to attract those experiencing financial fragility. The interest rates are great for me, but the late fees are the icing on the cake. Love those late fees.
Sad but true. The de-regulation is especially troubling, given the continued economic squeeze projected for this demographic for the foreseeable future.
The spike reflects adoption and financial pressure, but grocery usage is the signal retailers should watch most closely.
Some consumers, especially younger shoppers, use BNPL instead of a credit card. Others use it to stretch a household budget far enough to cover food. Convenience can turn into financial strain before the next grocery trip.
Retailers need to look beyond the conversion. A sale today loses value when the payment experience weakens trust, reduces future spending, or makes it harder for the customer to return next week.
BNPL will become more common in grocery as affordability pressure grows. Clear terms, responsible limits, and full cost visibility are essential.
The weekly grocery run should not become a monthly debt cycle.
The simple sales pitch and the simple use case make total sense. Installment payments create access and affordability where it might not exist otherwise. Painless and efficient. Outstanding. Now…zoom out. What may have started as efficient adoption is morphing into a contributing factor to a credit default problem. It’s impossible to read how the article describes the changing dynamics of the last several years and conclude ‘no problem’. Rising credit balances and rising default rates are signals. Let’s pay attention.
The big headlines are often about the Federal Debt. While concerning, there are solutions.
There are no solutions to BNPL (and extended credit card debt trends for users) other than massive default. This is truly dominoes waiting to fall.
BNPL growth reflects both adoption and financial stress. Its use for groceries deserves particular attention because groceries are purchased repeatedly. A consumer could still be paying for several earlier baskets when the next one is purchased.
BNPL may become commonplace in grocery because it offers immediate flexibility. But it does not make the basket more affordable. When it is used repeatedly, a routine household expense can become rolling debt. Interest and late fees increase that risk.
The real test is not how many customers adopt BNPL. It is whether they could have paid for the groceries without it. If they could not, BNPL may be masking a continuing cash-flow shortage rather than solving one.
Yes, loans, no matter what kind, should never outlast the product that they are borrowed against.
There’s really no good news here. American families are stretched, and for lower-income families it’s going to get worse as health care costs soar and they lose insurance. Looking at Neil’s comment that 28% of these loans are seeing some level of default is a significant indicator in my opinion.
Bottom line, as Craig states- whatever the reason- this isn’t indicative of anything great.
BNPL providers claim growth reflects consumer preference while 47% of borrowers pay late and grocery usage doubles in a single year. Follow the incentive structure: retailers get paid upfront by BNPL providers and carry zero repayment risk. They have no reason to question whether the customer should be financing Tuesday’s groceries over four installments. The product is consumed before the first payment is due. That is not payment flexibility. It is household deficit spending with a consumer-friendly interface. When financing outlasts the shelf life of what was financed, the system is extracting value, not creating it.