Growing Reliance on Buy Now, Pay Later for Groceries

A recent survey conducted by LendingTree reveals a significant rise in the use of buy now, pay later (BNPL) financing among Americans, particularly for essential expenses like groceries. The survey indicates that nearly one-third (29 percent) of BNPL users have utilized this payment method for grocery purchases, a notable increase from 14 percent two years ago. Among Generation Z users, this figure escalates to 38 percent. BNPL allows consumers to make immediate purchases and pay for them in smaller, typically interest-free installments over time, which has made it an increasingly popular option for managing everyday expenses.

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The survey highlights that over half (54 percent) of BNPL users feel they would struggle to make ends meet without these loans, with the figure rising to 62 percent among parents with children under 18. Additionally, 47 percent of users reported having made a late payment on a BNPL loan in the past year, an increase from 34 percent in 2024. This trend raises concerns about the financial stability of households relying on BNPL, as noted by Matt Schulz, chief consumer finance analyst at LendingTree, who stated, “When nearly half of users say they’ve paid late, it shows how thin many households’ margins are right now.”

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The survey also reveals that some users are turning to BNPL for essential bills, with 13 percent using it to pay rent and 15 percent for medical, dental, or veterinary expenses. As the popularity of BNPL grows, federal lawmakers are considering how to regulate this financing option, which currently faces fewer restrictions compared to traditional credit products. Research from the Consumer Financial Protection Bureau (CFPB) indicates that BNPL users often have riskier credit profiles and may take on multiple loans simultaneously, raising concerns about their financial exposure.

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Despite the rapid growth of BNPL, its overall impact on financial stability is still considered limited. A February economic brief from the Federal Reserve Bank of Richmond, authored by Zhu Wang, vice president for research in financial and payments systems, states, “Given its current scale, debt outstanding and observed default rates, the impact of BNPL on financial stability appears limited at present.” Wang also noted that while there could be spillovers to other consumer credit markets, there is currently no clear evidence of elevated stress.

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• “BNPL can be a helpful tool, but these numbers raise real concerns,” — Matt Schulz, Chief Consumer Finance Analyst, LendingTree

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• “Given its current scale, debt outstanding and observed default rates, the impact of BNPL on financial stability appears limited at present,” — Zhu Wang, Vice President for Research, Federal Reserve Bank of Richmond

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The findings from LendingTree underscore the growing reliance on BNPL for essential purchases, highlighting both its benefits and the potential risks associated with its use. As the landscape of consumer financing evolves, the need for regulatory oversight becomes increasingly pertinent.

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