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
Nicholas Morine
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.
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?
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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.
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?