As food inflation continues to grip the nation, more people are turning to buy now, pay later (BNPL) services to navigate the soaring costs of groceries and takeout meals.
With financial pressures mounting and budgets stretched thin, BNPL has emerged as a lifeline for consumers across various income brackets, allowing them to manage their expenses amidst economic uncertainty.
Recent research from PYMNTS Intelligence reveals that approximately 15 million consumers, constituting 6.5% of the US population, relied on BNPL installment loans to cover their grocery bills or manage weekly food expenditures last year.
Even higher-income households, earning over $100,000 annually, have embraced this payment method, albeit to a lesser extent.
Cost-cutting
The persistently high food prices have prompted households across the income spectrum to adopt cost-cutting measures. While some consumers opt for more affordable grocery stores or compromise on the quality of their purchases, others turn to BNPL to alleviate immediate financial burdens associated with food purchases.
In a bid to attract price-conscious consumers, major food chains like McDonald’s are devising strategies to offer compelling deals and affordable meal options.
However, not everyone is resorting to BNPL for their food purchases.
Some consumers prefer to tighten their belts by dining at home more frequently amid the prevailing economic uncertainty.
Despite the convenience offered by BNPL services, financial experts caution against overreliance on these installment loans.
While BNPL may seem harmless for smaller purchases, there is a risk of accruing unnecessary debt if not managed responsibly.
Delinquent payments could adversely affect one’s credit rating, underscoring the importance of prudent financial management.
