Financing groceries: buy more shoppers now and pay for food later

The current state of the economy is in question because shoppers have resorted to financing their groceries through loans “buy now, pay later”.

An option that is usually used for large purchases, such as electronics and holidays, increases as more consumers use it to buy everyday essence. With food prices reportedly 28% higher than in 2020, more consumers “buy now, pay later” loans as a useful way to manage their cash flow. According to The New York TimesOther consumers say that the increased use of companies such as Klarna, Affirm and AfterPay for everyday essential supplies indicate an increase in financial stress Among Americans.

“I don’t think there is any question that it is at least a sign of how many people are struggling,” said Matt Schulz, Chief Consumer Financing Analyst at LendingTree. “If you live a salary of salary and you have a tight budget and you have several of these loans at the same time, it can be very easy to get over your skis here.”

A recent study into LendingTree showed that the percentage of consumers who use buy-now to pay for groceries has risen from 14% to almost a quarter since last year. A report from 2023 by Bankrate showed that black consumers were 63% more likely Use now buy, pay later loans Compared to white consumers. Last month, in its annual survey among American households, the Federal Reserve reported that households with a lower income earn less than $ 50,000 a year Responsible for the largest group From buying now, pay later users.

For the 29-year-old Tia Hodge, De Buy Now, later plans are useful for distributing payments for groceries, an account that amounted to a total of $ 400 for the Austerl, Georgia, resident in April. With the use of her Klarna app, she was able to split her payment into four episodes without interest. Randis Dennes, 42, also finds convenience when using a loan option. “I used the loans for groceries and even to pay my telephone bill,” said Dennies. “When everything has become so expensive – groceries, gas – it makes my life easier to use these loans to buy my groceries or what else I need at that time.”

Glenbrook Partners -Payment expert Christopher Uriarte does not see the increase in the use of Buy Now, pay later loans as “a sign of the financial apocalyps necessarily.”

Various consumers now see buying, pay later options as part of the growth of the industry. For some, the possibility to finance costs, such as gas, rent, electricity, internet, heat and even streaming services, a more affordable alternative to traditional credit cards.

As previously noted by Black undertakingThe recent tariff requirements of President Donald Trump already have large retailers, production companies and brands such as Walmart, Mattel, Adidas, Temu, Procter & Gamble and Black & Decker encouraged prices to increase in their plans. Financial experts advise shoppers to be responsible in the use of the loan options to prevent extra financial tension. According to the Federal Reserve survey, now almost a quarter of all buy, later users reportedly made a late payment last year, a strong increase compared to 2023.

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