A significant and growing number of Americans are turning to short-term financing tools to cover basic necessities, with nearly one-third of buy now, pay later (BNPL) users now using the loans for groceries, according to a new survey. The data reveals a deepening dependence on this form of credit for household essentials, raising questions about consumer financial strain and the regulatory landscape for these products.
The survey from LendingTree, conducted in March, found that 29% of BNPL users have utilized the service for groceries, a figure that has doubled from just 14% two years ago. The reliance is even more pronounced among younger consumers, with 38% of Gen Z BNPL users reporting they've financed grocery purchases this way. This shift marks a notable evolution for a payment method once primarily associated with discretionary retail purchases.
"BNPL can be a helpful tool, but these numbers raise real concerns," said Matt Schulz, chief consumer finance analyst at LendingTree. "When nearly half of users say they've paid late, it shows how thin many households' margins are right now." The survey indicates 47% of users made a late payment on a BNPL loan in the past year, up from 34% in 2024.
The findings point to broader financial pressure. More than half (54%) of BNPL users stated they would be unable to make ends meet without access to these loans. That figure climbs to 62% among parents with children under 18. The use of BNPL has expanded beyond retail into critical areas of household finance: 13% of users have employed it to pay rent, while 15% have used it for medical, dental, or veterinary bills.
This consumer trend unfolds as federal lawmakers and agencies scrutinize the BNPL sector. The payment method, which allows consumers to split purchases into typically interest-free installments, has operated under fewer rules than traditional credit cards. Research from the Consumer Financial Protection Bureau indicates BNPL users often have riskier credit profiles and frequently juggle multiple loans simultaneously.
The market has exploded in scale. According to CFPB data, BNPL loan originations from major lenders surged from approximately $3 billion in 2019 to over $45 billion in 2023. Despite this dramatic growth, BNPL still represents only about 1% of total spending volume in the credit card market. This rapid expansion in a lightly regulated space has prompted calls for clearer oversight to protect consumers, a debate that mirrors other contentious policy areas where administration actions face scrutiny, such as when an Acting Attorney General defended political involvement at the Justice Department.
Analysts are divided on the systemic risks. In a February economic brief, the Federal Reserve Bank of Richmond suggested the immediate threat to financial stability appears contained. "Given its current scale, debt outstanding and observed default rates, the impact of BNPL on financial stability appears limited at present," wrote Zhu Wang, vice president for research in financial and payments systems at the Richmond Fed. He added that while spillovers to other consumer credit markets are possible, "there is no clear evidence of elevated stress to date."
The survey data underscores a segment of the population using financial technology to bridge gaps in their monthly budgets, a sign of persistent economic pressure even as other metrics show strength. This financial maneuvering among younger Americans, in particular, aligns with other surveys revealing shifting priorities and challenges for that demographic, such as a Gallup poll that uncovered a significant religious gender gap among young adults.
The growing use of BNPL for essentials like food and rent transforms it from a convenience product into a potential lifeline—and a potential risk. As reliance increases, so does the potential for payment distress, placing the debate over consumer protection and the appropriate regulatory framework squarely before policymakers. The coming months will likely see increased legislative and regulatory activity aimed at defining the rules for this burgeoning sector of consumer finance.
