More and more Americans are buying purchases now, paying later loans and purchasing groceries, according to new lending tree data released Friday.
The figure is the latest indicator that some consumers are struggling to provide essentials such as food as they are breaking under uncertain economic pressure.
A survey conducted April 2-3 of 2,000 US consumers between the ages of 18 and 79 reported that about half of them used buy now and paid for later services. Of these consumers, 25% of respondents said they were using BNPL loans to buy groceries from 14% in 2024 and 21% in 2023.
Meanwhile, 41% of respondents said they made late payments on BNPL loans over the past year.
Matt Schulz, chief consumer finance analyst at Lending Tree, said most respondents who said they paid the BNPL bill late weren’t around a week.
“A lot of people are struggling and are looking for ways to expand their budget,” Schultz said. “Inflation remains a problem. Interest rates are still very high. There is a lot of uncertainty about tariffs and other economic issues, and many people are looking for ways to expand their budgets.”
“For so many people, it means leaning towards buying now and paying for later loans.
He stopped calling the outcome a measure of recession, but conditions are expected to drop even further before they improve.
“I think that’s going to get worse, at least in the short term,” Schultz said. “I don’t know there are many reasons to hope these numbers get better in the short term.”
Loans that allow consumers to split their purchases into several smaller payments are a common alternative to credit cards, as they often don’t charge interest. However, consumers can see high fees if they pay late, and stacking multiple loans can cause problems. A Lending Tree survey said 60% of BNPL users had multiple loans at once, with the fourth one saying they held three or more at once.
“It’s really important that people be careful when people use these things because there’s a lot of risk to mismanage it, even though they’re really good, interest-free tools that help you make it from one salary to the next,” Schultz said. “That’s why people should step on it lightly.”
The Loan Tree survey revealed that Billboard revealed that around 60% of Coachella participants in general admission had purchased concert tickets now, paid later loans, sparking debate about their economic status, and that consumers were using debt to maintain their lifestyle. A recent announcement from Doordash made the redundancy and joke that Americans are now having cheeseburgers and burrito funding as they have started accepting BNPL funding from Klarna into food delivery, which has made it so hard that they now have cheeseburgers and burrito funding.
Over the past few years, the job market has been strong and wage growth withstands inflation, so consumers have been relatively well maintained, at least for some workers, in the face of sustained inflation and high interest rates.
But earlier this year, large companies, including Walmart Airlines and Delta Air Lines, began warning that dynamics were beginning to change and demand was seen cracks.