Around a quarter of buy now, pay later users are funding their food with the loans, a fresh survey indicates
Americans are increasingly reliant on buy now, pay later (BNPL) loans to purchase their groceries, a survey conducted by online lending marketplace Lending Tree indicates. The trend is bound to continue and the situation is unlikely to improve in the near term, the marketplace’s analysts warn, citing inflation, high interest rates and growing concerns around tariffs.
The survey was conducted by the platform early in April among some 2,000 American consumers aged 18 to 70, with around a half of them reporting they have been using the BNPL services.
The short-term loans scheme has become increasingly popular over the past few years, as it allows to split up purchases into smaller payments, its providers often do not charge interest, while credit score is not taken into account. Paying late or stacking up multiple loans, however, could result in high fees.
Some 41% of BNPL users admitted missing payments, with the figure growing from 34% recorded by the marketplace last year. Nearly a quarter of BNPL users said they had three more active loans at a time. At the same time, a vast majority of BNPL users – some 62% – falsely believe the loans of the type help their credit score, while a further 26% were not sure on the matter, the survey indicated.
The poll suggested a nearly twofold growth of BNPL use to fund groceries, with 25% of the scheme users paying for their foodstuffs through it compared to only 14% last year. The practice has been especially popular among the Gen Z loan users, with groceries being their fourth most common BNPL purchase, according to the survey.
The BNPL use is bound to grow and the trend observed in the survey is unlikely to change in the short term at least, Lending Tree’s chief consumer finance analyst, Matt Schulz, has said. The analyst cautioned against overusing BNPL loans, describing it a “really good interest-free tool,” but warning of “a lot of risk in mismanaging it.”
“Inflation is still a problem. Interest rates are still really high. There’s a lot of uncertainty around tariffs and other economic issues, and it’s all going to add up to a lot of people looking for ways to extend their budget however they can,” he said, warning the situation with the loans is likely “to get worse.”
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