Americans are using the buy now, pay later (BNPL) loans to buy everyday items like groceries, and while these loans are not new, how people are using them is changing.
“It’s a good way to get some things I either need or want, and to be able to manage my expenses in a way that also keeps me a little more fluid and flexible,” Javon Franks said.
For the past year, Franks has taken advantage of the BNPL loan service, Affirm.
“Even before you make the purchase, it tells you how much is each payment going to be, how often,” Franks said.
He’s not alone. According to Bankrate economic analyst Sarah Foster, two in five Americans have used a BNPL service.
“We’re seeing that even stress levels about just affording everyday expenses and saving for emergencies, those are rising,” Foster said.
A study by LendingTree found that a quarter of BNPL users say they’ve used the loans to buy groceries. That’s up from 14% just a year ago.
Meanwhile, two-thirds say they’d consider using loans for food delivery.
George Campbell, a personal finance expert, warns these loans can be a slippery slope of overspending and debt accumulation.
“You get hit with late fees, $7 per missed payment. You get hit with a crazy APR of up to 34% with Klarna if you missed these payments,” Campbell said.
Both experts agree with tariff talks and the U.S. economy having its worst quarter since 2022, these BNPL loans are here to stay.
“It’s scary to see the growth of these companies, and unfortunately, I don’t think it’s an option people are wanting to turn to,” Campbell said.
“The fact that prices are threatening to increase, again, it just comes at a tough time for them,” Foster said.
