by Stacy Jackson
June 5, 2025
Some consumers view the increased demand for “buy now, pay later” loans as a signal that financial stress is rising among Americans.
The current state of the economy is in question as shoppers have resorted to financing their groceries through “buy now, pay later” loans.
An option typically used for major purchases, such as electronics and vacations, is on the rise as more consumers utilize it to purchase everyday essentials. With food prices reportedly 28% higher than they were in 2020, more consumers are using “buy now, pay later” loans as a helpful way to manage their cash flow. However, according to The New York Times, other consumers say the increased use of companies like Klarna, Affirm, and Afterpay for everyday essentials may signal a rise in financial stress among Americans.
“I don’t think there’s any question that it is at least a sign of how much people are struggling,” said Matt Schulz, chief consumer finance analyst at LendingTree. “If you’re living paycheck to paycheck and you’re on a tight budget and you have several of these loans out at one time, it can be very easy to get over your skis here.”
A recent LendingTree survey revealed that the rate of consumers using buy-now, pay-later loans to finance groceries has increased from 14% to nearly a quarter since last year. A 2023 report from Bankrate found Black consumers were 63% more likely to use buy now, pay later loans compared to white consumers. Last month, the Federal Reserve reported in its annual survey of U.S. households that lower-income households earning less than $50,000 a year accounted for the largest group of buy now, pay later users.
For 29-year-old Tia Hodge, the buy now, pay later plans are convenient for spreading out payments for groceries, a bill that totaled $400 for the Austell, Georgia, resident in April. With the use of her Klarna app, she was able to split her payment into four installments with zero interest. Randis Dennies, 42, also finds convenience in using a loan option. “I’ve used the loans for groceries and even to pay my phone bill,” said Dennies. “When everything has gotten so expensive — groceries, gas — it makes my life easier to use these loans to buy my groceries or whatever else I need at that moment.”
Glenbrook Partners payments expert Christopher Uriarte doesn’t see the rise in using buy now, pay later loans as “a sign of the financial apocalypse per se.”
Several consumers view buy now, pay later options as part of the industry’s growth. For some, the ability to finance expenses such as gas, rent, electricity, internet, heat, and even streaming services has presented a more affordable alternative to traditional credit cards.
As previously noted by Black Cosmopolitan, President Donald Trump’s recent tariff demands have already prompted major retailers, manufacturing companies and brands like Walmart, Mattel, Adidas, Temu, Procter & Gamble, and Black & Decker to raise prices in their plans moving forward. Financial experts advise shoppers to be responsible when using the loan options to avoid additional financial strain. According to the Federal Reserve’s survey, nearly a quarter of all buy now, pay later users reportedly made a late payment last year, a sharp rise compared to 2023.
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