Breaking Point: 25% Of Americans Use Buy Now, Pay Later Apps To Purchase Groceries, But Are Paying Those Bills Late

“It’s going to get worse, at least in the short term. I don’t know that there’s a whole lot of reason to expect these numbers to get better in the near term.”

The American consumer continues to battered and beaten at every angle, and a new report proves the population can hardly afford groceries.

More Americans are relying on Buy Now, Pay Later (BNPL) apps to finance all sorts of purchases, namely groceries, and many more are struggling to even pay those fees. The WinePress reported in 2022 that there was an increasing surge in Americans using these apps to buy groceries and fast food with them.

Personal finance author Jason Sadowski explained that these programs are basically loans with unique implications, with some apps charging late fees that can exceed the amount of interest payments for credit cards. Missing a payment also has the potential of dinging that person’s credit score.

But there are plenty of critics, with one user telling the New York Times that they soon found themselves in debt after using these apps. “If you are not financially literate, it is easy to abuse it and say, ‘I will just keep using it, it is free money,’” said the frustrated user.

BNPL has vastly increased since 2020, and has been used to pay for the most basic of items. One company called Zilch has even partnered with Uber Eats, Papa Johns, and Dominos, to offer customers the choice to pay for their meal over the course of 6 weeks.

A recent credit report by Lending Tree highlighted just how increasingly dependent Americans are BNPL.

Here are the key findings from their report:

• An increasing percentage of BNPL users pay late. 41% of BNPL users say they paid late in the past year, up from 34% a year ago. Surprisingly, high-income borrowers are among the most likely to pay late, along with men, young people and parents of young kids. However, 76% of late payers were late by no more than a week or so.

• Nearly 1 in 4 BNPL users (23%) say they’ve had three or more active BNPL loans at one time. High-income people are the most likely income bracket to say so. Also, Gen Zers and millennials are twice as likely as baby boomers to say so. Meanwhile, 40% say they’ve never had more than one at a time.

• More users buy groceries with BNPL. 25% of BNPL users say they’ve used the loans to buy groceries. That’s up from 14% just a year ago, amid rising prices at the supermarket. One-third of Gen Z BNPL users say they’ve done so, making it the fourth-most common BNPL purchase for that age group, trailing clothing, technology and home decor.

• Two-thirds of BNPL users say they’d consider using it for food delivery, and many are putting their money where their mouth is. DoorDash and BNPL giant Klarna recently announced a partnership to allow customers to pay for DoorDash deliveries with BNPL. However, we found that 16% of BNPL users say they’ve already used BNPL for restaurant food delivery or takeout.

• More users see BNPL as a “bridge” to their next paycheck. 33% say this, up from 30% last year and 27% the year before. High earners, men, younger Americans and parents of young kids are among the most likely to say so.

• More than 6 in 10 BNPL users (62%) incorrectly believe making on-time payments on BNPL loans helps your credit score. Only 13% say they don’t help your credit score, which is correct, while 26% aren’t sure. Men and high-income earners are among the most likely to believe this falsehood. Younger Americans are more likely to believe it than their older counterparts, but even 54% of boomers do.

The report found that PayPal was the most popular BYPL app at 51% followed by Klarna, Afterpay and Affirm all tied for second at 38%.

Lending Tree’s chief consumer finance analyst, Matt Schulz, commented on some of the findings in a comment to Fortune.

“It's pretty clear that as people struggle with inflation and other kinds of economic uncertainty, people are looking to things like BNPL loans to help them extend their budget.

“When buy-now, pay-later started, it was typically about designer handbags and appliances and things like that. But now people are looking at it for things like groceries and food delivery.”

He also told CNBC:

“A lot of people are struggling and looking for ways to extend their budget. 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.”

“For an awful lot of people, that’s going to mean leaning on buy now, pay later loans, for better or for worse.

“I do think it’s going to get worse, at least in the short term. I don’t know that there’s a whole lot of reason to expect these numbers to get better in the near term.”

Even though Americans are increasingly using these apps to pay for groceries, many others are using them to finance luxury and non-necessity purchases. CNBC reported:

Lending Tree’s findings come after Billboard revealed that about 60% of general admission Coachella attendees funded their concert tickets with buy now, pay later loans, sparking a debate on the state of the economy and how consumers are using debt to keep up their lifestyles. A recent announcement from DoorDash that it would begin accepting BNPL financing from Klarna for food deliveries led to widespread mockery and jokes that Americans were struggling so much that they were now being forced to finance cheeseburgers and burritos.

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AUTHOR COMMENTARY

Two points:

Proverbs 28:3 A poor man that oppresseth the poor is like a sweeping rain which leaveth no food.

Americans are tapped-out. They have exhausted through their savings (if they even had any to start with) and simply cannot afford basic necessities at this point; and it’s not because they are just lazy bums unwilling to work: many of them are already working multiple jobs, and yet the dollar’s purchasing power has been nearly eroded entirely, inflation continues to rise (despite MAGA propaganda), the ongoing calamity with these tariffs and Trump’s neurotic on-off policy, corporate price gouging; the price of other bills, insurance, and housing, etcetera, are all contributing factors.

In a pinned comment, Trends Journal contributor

Gregory Mannarino

responded to these headlines, writing:

“What This Really Means. Americans are financing their groceries, BASIC survival needs with buy now, pay later loans. More are falling behind on those loans, meaning even credit band-aids are bleeding out. Persistent inflation caused and engineered is breaking the financial back of the middle class. People are cracking, emotionally, financially, spiritually under the relentless squeeze.

“The Deep Reality. This is not an accident. This is not bad luck. This is the direct result of a controlled demolition of the middle class.

“Debt is the weapon. Inflation is the silent bullet. Credit dependency is slavery.

“This is the final warning sign. This is the emotional setup for people to BEG for new systems (like digital currencies, controlled rations, etc.) under the guise of "help."“

The second point is as follows:

Proverbs 21:17 He that loveth pleasure shall be a poor man: he that loveth wine and oil shall not be rich.

Americans continue to “doom spend.” This is the YOLO and FOMO mentality, this is the philosophy of Isaiah 22:13: “And behold joy and gladness, slaying oxen, and killing sheep, eating flesh, and drinking wine: let us eat and drink; for to morrow we shall die.”

Instead of tightening their belts and trimming the fat, cutting out vanity and non-necessities, Americans are determined to live it up and go down with the ship. This is suicide and they know it and they don’t care: ‘someone else can pay for it because I am entitled and deserve things.’

Gen Z economic commentator Kyla Scanlon said last month: “We have a gambling economy. We have memecoin, sports betting. We love a good vice in the United States, and we can do it completely frictionless. Like, we don't even have to put on pants.”

That’s a good assessment. Covetousness has never been worse and it will only continue to get worse, as the King James Bible warned would occur in the last days (2 Timothy 3:1-9).

The takeaway here is simply: don’t use BNPL, and do what you can to avoid debt at all costs right now, and work to pay it off if you have some. Debt freedom is always wise, but as we head into a full-blown collapse of the system soon not being shackled is key.

Psalm 15:5 He that putteth not out his money to usury, nor taketh reward against the innocent. He that doeth these things shall never be moved.

Proverbs 22:7 The rich ruleth over the poor, and the borrower is servant to the lender.

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[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).

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