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Posted on 06/08/2026 2:07:56 PM PDT by Angelino97
Americans have run their credit cards to the limit. Now they’ve turned to buy-now-pay-later plans to buy gas and groceries.
This is yet more evidence that American consumers are broke, stressed, and buried in debt as inflation steals their purchasing power.
Buy-now-pay-later (BNPL) platforms allow users to purchase items by paying several smaller installments (typically around 4) over time.
Block operates the Afterpay BNPL platform. The system was originally set up to provide short-term financing for bigger purchases. But according to company data, usage is expanding into everyday spending categories. The average customer used Afterpay to purchase gas 3.6 times and groceries 2.2 times between Feb. 4 and May 15.
“What we’re seeing with Afterpay on the Cash App card is just everyday spending. We’re really over-indexing toward gas stations and fuel, grocery stores, food,” Block's head of operations, Owen Jennings, said.
Affirm CEO Max Levchin made a similar observation during a CNBC interview last month.
“The single largest category for us is general merchandise — Affirm is truly the everything product at this point.”
Polling by LendingTree mirrors Block’s data.
Nearly a third (29 percent) of BNPL users said they used the service to buy groceries. That was up 14 percent from two years ago. Thirty-eight percent of Gen Z users said they used BNPL for groceries.
More than half of the BNPL users (54 percent) said they wouldn’t be able to make ends meet without the service. That figure rises to 62 percent among parents with children under 18.
BNPL loans are generally interest-free if the installments are paid on time. BNPL providers make their money on interest and late fees when payments are late.
According to the LendingTree survey, 47 percent of BNPL users said they’ve made at least one late payment in the last year. That was up from 34 percent in 2024.
“When nearly half of users say they’ve paid late, it shows how thin many households’ margins are right now,” LendingTree chief consumer finance analyst Matt Schulz said.
Jennings told MarketWatch that some of the increase in BNPL can be attributed to a shift away from traditional credit cards. However, it’s not like American consumers have put away their credit cards.
Consumer debt is at a record level of $5.14 trillion. Revolving debt, primarily reflecting credit card balances, has surged to a record $1.4 trillion.
The data indicates that Americans are using credit cards to make ends meet. For instance, retail sales soared in March, reflecting rising gasoline prices. That same month, revolving debt also surged, growing by 9.1 percent.
BNPL programs provide a credit option for folks who can’t get a credit card or who have run their plastic to the limit. But they come with a dark side. Purchases can quickly pile up. While the payments might be small, multiple loans can easily balloon into big monthly obligations. As MarketWatch explained, “Managing a dozen different repayment schedules across multiple apps can easily cause shoppers to lose track of their obligations, resulting in missed payments and steep late fees.”
The growing use of BNPL platforms might reflect a shift in preference away from credit cards, but the growing number of people borrowing money to make everyday purchases is not a good sign. An economy built on borrowing money to buy everyday goods isn’t sustainable. At some point, credit cards reach their limit. In fact, that may be why some people are turning to BNPL.
While many mainstream analysts claim continued spending demonstrates the “resiliency” of the American consumer, desperate would probably be a better term.
This goes to show that inflation isn’t just some arcane policy topic. It impacts real people, and it is strangling many Americans. Sadly, inflation is the plan, so consumers will have to continue to figure out how to make ends meet as their dollars buy less and less over time.
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Creditworthiness and higher interest rate?
Nothing about the $800 car payment and $1200 rent because you don’t want roommates due to “my mental health”.
Typical post here is “I need a 2 bedroom unit that allows dogs (sweet gentle pit mix) and it has to be a private landlord because evictions. Limit $800”. Hunting for unicorns.
But they’re still driving that fully loaded 2025 GMC quad cab.
At some point the prices rise too high as the credit runs out and then the people can’t pay the debt on the interest and so even principle won’t becovered so the banks start to sweat....fiancial panic, then no one can buy the overpriced stuff... so prices deflate but people have no money to buy anything because they are in debt. Layoffs and huge major depression and the government itself has no money , having to pay interest with fiat money that will have no value. Oil, farm products and mined goods are all we have left to barter with other nations with...everything else is just vapor ware.
Oh what a mess!
Prepare for a slew of “if only they would lay off the avocado toast and rotisserie chicken and grow their own wheat” wisdom.
Well, duh. After paying for essentials like cell phones and cable and video games and tattoos and piercings who can afford food?
I’ve had to evict numerous people for nonpayment of rent. They all had one thing in common. They were paying a huge cable bill. I know because the bills kept coming after they were gone. The thing is, miss a cable bill payment and you lose the service. So those were always...always up to date. But the rent was anywhere from three to six months unpaid.
Yes, people may be buying food on credit. But before I spare them some sympathy, are they paying $300 per month on cable? And what about the full featured phone plans?
fools...
Been hearing this for TWO years now, so this is not new news of even something that started with President Trump...
Buy now pay later for food? What happens if a person doesn’t pay for that food later? Will that person’s digestive system be appropriated by the grocery store?
Buy now pay later is the wrong term. It should be called borrowing, and borrowing and not paying, can lead to a person’s property taken from them as payment.
Many of these depend on the government to subsidize their lifestyles and bail them out. When it comes voting time, there is only one political party who has and will continue to pander to them.
The 3 things absolutely killing most younger people that they choose to pay. I see these 3 taking up to 3/4 of some of their pay.
3 Cable
2. Cell phones
1 Fast food
We believe in laissez-faire capitalism. The government does not have the right to interfere in the economy. Capitalism is the parallel of democracy and only works when people are given unfettered access to the market place. The government must get out of the business of subsidies, regulation and interference. Together with this, Enter Stage Right also believes that taxation is immoral. The government is given a monopoly of force to protect its citizens from external and internal aggression. It is morally wrong for a government to use that monopoly of force to take production from individuals. What we produce is the material representation of our intellect.From the manifesto of Enter Stage “Right”. Clearly they do not understand that the USA is a republic, not a democracy, nor do they understand the difference between the two (when Woodrow Wilson said that “socialism and democracy are almost, if not quite, one and the same”, he was being quite frank about that, because it has proven so in practice).
We believe that religion and conservatism generally do not mix, though we firmly believe and defend the right of a person to believe. Some religious ethics are opposed to capitalist activities. Further, religious ethics are often opposed to proper self-interest. As well, tradition only serves to institutionalize the status quo in a world that is constantly changing. People are free to believe whatever they want, but those beliefs must be tested in the marketplace of ideas. …
I use my Walmart card to buy groceries. By the end of the month, I can get about $40 taken off the bill.
And 20 streaming services.
This doesn’t use your credit line and has no interest.
I have never come close to my credit limit.
If they would given me a 3% discount on gas for paying cash like some restaurants do, I would pay cash. Thirty years ago I always paid cash for my gas. There just is no advantage to paying cash for gas now.
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