US consumers turn to ‘buy now, pay later’ for essential expenses

American consumers are increasingly utilizing ‘buy now, pay later’ (BNPL) microloan services to cover essential living expenses. While these installment plans were originally designed for discretionary purchases like clothing and electronics, they are now being used to finance groceries, utilities, rent, medical visits, and even taxes.

Research from LendingTree indicates that 29% of users of brands such as Klarna and Affirm use these services for groceries, and 54% of users report they would be unable to make ends meet without them. The Federal Reserve also noted that one in five Americans used BNPL to pay for food at major retailers or through delivery apps in the past year.

Financial experts warn that the ease of access to these loans—which often do not require hard credit checks—can lead to ‘loan stacking,’ where consumers become overwhelmed by multiple small debts. This trend has contributed to rising default rates as inflation and the cost of living outpace wage growth.