Around a quarter of buy now, pay later users are funding their food with the loans, a fresh survey indicates.
Americans are increasingly reliant on buy now, pay later (BNPL) loans to purchase their groceries, a survey conducted by online lending marketplace Lending Tree indicates. The trend is bound to continue and the situation is unlikely to improve in the near term, the marketplace’s analysts warn, citing inflation, high interest rates and growing concerns around tariffs.
The survey was conducted by the platform early in April among some 2,000 American consumers aged 18 to 70, with around a half of them reporting they have been using the BNPL services.
The short-term loans scheme has become increasingly popular over the past few years, as it allows to split up purchases into smaller payments, its providers often do not charge interest, while credit score is not taken into account. Paying late or stacking up multiple loans, however, could result in high fees.
Some 41% of BNPL users admitted missing payments, with the figure growing from 34% recorded by the marketplace last year. Nearly a quarter of BNPL users said they had three more active loans at a time. At the same time, a vast majority of BNPL users – some 62% – falsely believe the loans of the type help their credit score, while a further 26% were not sure on the matter, the survey indicated.
The poll suggested a nearly twofold growth of BNPL use to fund groceries, with 25% of the scheme users paying for their foodstuffs through it compared to only 14% last year. The practice has been especially popular among the Gen Z loan users, with groceries being their fourth most common BNPL purchase, according to the survey.
The BNPL use is bound to grow and the trend observed in the survey is unlikely to change in the short term at least, Lending Tree’s chief consumer finance analyst, Matt Schulz, has said. The analyst cautioned against overusing BNPL loans, describing it a “really good interest-free tool,” but warning of “a lot of risk in mismanaging it.”
“Inflation is still a problem. Interest rates are still really high. There’s a lot of uncertainty around tariffs and other economic issues, and it’s all going to add up to a lot of people looking for ways to extend their budget however they can,” he said, warning the situation with the loans is likely “to get worse.”
Image credit: Getty Images
This is nothing new…
Americans are the most sub-conscience punished people, and they don’t even realise it (the frogs in the slowly boiling pot…).
One bloke who left the USA with his small family 15 years ago told me about what I interpret as domestic horror stories.
Paying for groceries on credit cards, having to go on food stamps, serving in the US Military for a number of years, becoming disabled as a result of military service, yet denied compensation for over 12 years!
Food prices hyper-inflating, the militarisation of the Police at all levels (local, county, state & federal…), and Communist US President Barack Obama trashing the US Constitution (NDAA, double taxation on wages earned overseas, and the establishment of being harassed by the IRS w/ ‘overseas reporting’, being unable to open bank accounts overseas due to the same, etc.).
Then, he said that when the Patriot Act was renewed every year, and that the J3w$ were actually running the country, that is when he & his family sold everything, and left the Northern Hemisphere.
This came after he discovered via the FOIA that he had a 554 page FBI File, and he has never committed a crime, or been arrested.
He discovered that he and his wife were blacklisted from practicing their licensed professions, and were marginalised with menial jobs.
Writing to (s)elected officials’ resulted in immediate criminal investigations and political profiling.
So, he left the United States of israel, and now lives in Otago. All is well, despite the occasional passive-aggressive attitudes from the locals.
He knew the country was f@#ked, and is evermore convinced that he did the right thing coming to New Zealand, but warns us that there are signs here of becoming like the US. He & his family are now New Zealanders, and renounced US Citizenship upon becoming Kiwis.
Anyone who believes credit is the solution gets what they deserve.
I’m 72 yrs old, own a large home with a second as rental property. I also own vacant land, 20 acres in 1 county, 8 acres in another. I was a low paid factory worker with 2 children and managed to accumulate what I have saving and using cash. NEVER had a mortgage or auto loan!
Why would anyone buy a house for 20k and pay a bank 60k over 30 years to own it? OR buy a 30k new car (losing 5k in value as soon as papers are signed), and pay triple for full coverage insurance instead of cash for used car with just liability insurance?
Credit is not your friend…..