Rising Grocery Costs Push More Americans into Credit Card and Pay‑Later Debt

High grocery prices are creating downstream financial troubles for more Americans.

More than a quarter of U.S. working‑age adults who used credit cards to pay for groceries last year struggled to repay those balances in full, either making only the minimum payment or missing it entirely, according to new research from the Urban Institute.

Nearly one in ten respondents relied on “buy now, pay later” loans, and a third of those users failed to make a payment. Additionally, almost one in twenty turned to payday‑loan cash to cover food expenses, based on a December survey of over 7,500 adults ages 18 to 64.

“Families may be having trouble affording groceries with the resources they originally intended to use for food,” said Kassandra Martinchek, lead author of the report and senior research associate at the Urban Institute, in an interview with Yahoo Finance. “They’re resorting to credit, payday loans, or drawing down savings they hadn’t planned to use for groceries.”

Government data show grocery prices have risen 2.7% over the past year and are up nearly 32% from pre‑pandemic levels.

The share of adults who paid for groceries with a credit card and then missed a minimum payment increased to 8.7% last year, up from 7.1% in 2023. Missed payments can trigger late fees and penalties, worsening consumers’ financial strain.

“When they accumulate debt by not repaying their credit‑card or buy‑now‑pay‑later bills in full, they must later service that debt while still meeting everyday financial needs,” Martinchek explained.

The rise was especially pronounced among families earning 200% to 400% of the federal poverty level (approximately $64,300 to $128,600 for a family of four in 2025), where the share unable to make a minimum payment rose from 9.3% in 2023 to 12.3% in 2025.

Low‑ and moderate‑income households, more likely to use buy‑now‑pay‑later for food, also faced higher payment delinquency rates. About half of low‑income adults who used these loans missed a payment, compared with roughly one‑third of moderate‑income adults and one‑quarter of high‑income adults.

Meanwhile, about 20% of working‑age adults overall tapped long‑term savings to pay for food.

“Savings can provide short‑term relief for budget shortfalls, but depleting them for daily expenses may signal financial risk,” the Urban Institute warned in its report.

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