High costs in USА drive many people to “buy now, pay later” for groceries

Rising living expenses and reduced incomes are forcing many people to rely on quick loans for everyday purchases such as food, according to surveys conducted in the USA. A study by the consumer lending platform Lending Tree reveals that 25% of their clients use short-term loans for daily shopping needs. This is a sharp increase from last year when only 14% of clients used “buy now, pay later” (BNPL) loans.

The survey was conducted between April 2nd and 3rd this year among 2,000 American consumers aged 18-79 years old. Approximately half of them use the “quick credit” service for purchases, with one quarter using it specifically for buying daily products.

Additionally, 41% of those surveyed admitted to delaying payments on these types of loans over the past year, compared to 34% in 2023. The data serves as evidence that some consumers struggle to afford their basic needs under the pressure of high prices and interest rates, note the authors of the study. When asked how confident they feel about their ability to make timely loan repayments, 63% of participants responded that they were “very confident,” while 30% were “somewhat confident.” Despite the reported level of confidence, the increase in missed payments suggests that many may be overestimating their ability to manage debt effectively, according to the study’s authors.

In addition to debt obstacles, younger generations face other challenges—nearly 71% of so-called Gen Z (born between the late 1990s and 2010) share that they have more than one active “buy now, pay later” loan. Among them, over a quarter admit to having at least three loans at the same time. About a third use loans as a “bridge until the next paycheck,” meaning they buy essential goods rather than items whose purchase can be delayed.

Almost half (48%) of all respondents shared that they regret using quick loans, and this percentage is even higher among Gen Z at 64%. A drawback of this method of shopping is the difficulty in returning purchased items compared to standard payments. Often, consumers must fully repay the loan before they can return unwanted goods.

In the US, consumer rights allow for the return of almost any purchased item without explanation, but this becomes more complicated when the items are bought on credit. In theory, if there is a lack of available cash, consumers could use credit cards, but maintaining a normal limit requires a good credit history. The type of BNPL resembles quick loans, with the difference being that money is not directly lent; instead, goods are acquired through a loan. Typically, these loans are used for luxury or larger purchases, such as electronics. Using them for food and daily shopping represents a new trend.