From CNBC: 2025-04-26 07:00:00

A growing number of Americans are turning to buy now, pay later loans for groceries, with a quarter of users using them for food, up from previous years. Late payments on these loans have increased, indicating financial strain due to inflation, high interest rates, and economic uncertainty, according to Lending Tree data.

Chief consumer finance analyst Matt Schulz noted that many struggling consumers are utilizing buy now, pay later loans to extend their budget, highlighting the financial challenges faced by many. While not a recession indicator, conditions are expected to worsen before improving, with inflation, interest rates, and tariffs adding to economic uncertainty.

Buy now, pay later loans are a popular alternative to credit cards, offering interest-free payments but high fees for late payments. Lending Tree’s survey found that many users have multiple loans simultaneously, increasing the risk of financial mismanagement. Consumers are advised to use caution when relying on these loans to manage expenses.

Lending Tree’s findings on the increased use of buy now, pay later loans for groceries come after revelations that a significant portion of Coachella attendees funded their tickets through such loans. The trend reflects how consumers are using debt to maintain their lifestyles amid economic challenges, sparking debates on the state of the economy.

Read more: More Americans buy groceries with buy now, pay later loans