A financial advisor points out thats a troubling sign
of ConsumerAffairsAugust 5, 2025
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A recent AP-NORC survey found that 14% of U.S. adults use Buy Now, Pay Later (BNPL) services for groceries, with 11% also using them for restaurant meals a trend financial experts warn could signal deeper economic stress.
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BNPL was originally designed for occasional, large purchases, but financial advisors caution that frequent use for essentials like food creates revolving debt, particularly among younger consumers with multiple active BNPL accounts.
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While BNPL can be interest-free if paid on time, missed payments often incur fees and collections and with some services now reporting to credit bureaus, the risk to consumers’ credit health is growing.
A survey conducted by AP-NORC found that more than half of American consumers are stressed by the cost of groceries. But how many consumers are coping with higher costs at the supermarket could mean trouble for the economy.
The poll found that 14% of adults reported using Buy Now, Pay Later services for groceries, allowing them to make immediate purchases and pay for them in installments. Eleven percent said they used BNPL services not only to pay for groceries, but also to purchase restaurant meals or meal delivery.
That isnt how these services were intended. BNPL was supposed to be a way for a consumer to make a major purchase, such as a new sofa, and pay for it in interest-free installments.
BNPL is an updated version of the old layaway plan offered by early 20th-century retailers, but with one big difference. Under the old plan, the merchant held the item until the consumer had enough money to pay for it.
With BNPL, the consumer receives the merchandise and pays for it in three or four interest-free payments every two weeks. If used only a couple of times a year for expensive items, it can be a cost-effective way to finance a purchase.
But Marcus Sturdivant Sr., a Charlotte, N.C., financial advisor, says consumers who use it multiple times for all types of purchases are simply kicking the can down the road. He said there is evidence that many young people have numerous BNPL accounts that are adding to their debt.
Could there be a bubble in buy now and pay later when the bill is due? he asked in a recent interview with ConsumerAffairs. If so, it would be due to Gen Z not wanting to pay the debt.
Consequences
While most BNPL services dont charge interest for on-time payments, not paying the bill incurs late fees and is usually turned over to a debt collector.
In January, the Consumer Financial Protection Bureau reported that BNPL applications and approval rates increased significantly from 2019 to 2022. The number of daily applications rose from just over 100,000 in 2019 to well over 1 million in 2022.
Financial advisors say using BNPL for food a recurring, essential expense turns a daily necessity into a form of debt. This is especially risky when the consumer is already living paycheck to paycheck.
Using BNPL repeatedly, accumulating several repayments across different weeks or services, can have severe consequences, especially lately. Due to recent changes, BNPL payments can show up on consumers’ credit reports. However, it depends on the BNPL provider, the type of loan, and whether the provider chooses to report to the credit bureaus.
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