‘Buy now, pay later’ for groceries? More shoppers are using it to cover essentials

You finished adding your monthly grocery essentials to your online cart and your total is just over $100. Then this option pops up: pay over time?

Services that allow you to pay over time have grown in popularity. The Washington Post reported analytics company GlobalData projects the $309 billion industry to swell more than 25% by 2026.

But should you use a buy now, pay later option to pay for your groceries? Let’s break it down.

What is buy now, pay later or BNPL?

These services are similar to credit cards. They allow you to make a purchase and pay for it over time, according to Investopedia. Except usually, there’s no interest.

They can be easier to qualify for compared to credit cards or loans.

But if you fall behind, you can get hit with late fees that hurt your credit score. The New York Times reported that users tend to be economically vulnerable.

What’s happening?

More and more people are using buy now, pay later platforms, such as Klarna, Affirm and Afterpay, to buy groceries.

BNPL services increased 40% in the first two months this year just for groceries, according to a report from Adobe Analytics, which analyzes online commerce transactions.

One person told the Times he ended up owing $1,000 to Klarna after spending more than he could afford on food.

This matters because it tells us people are now relying on BNPL options for essential purchases, instead of nonessential, because everyday needs are so expensive.

Prices are up 4% from last year. That’s better than the inflation rate last summer of 9.1%. The Federal Reserve is trying to cut inflation to 2%.

But these services are easier to access.

The Washington Post reported that consumers are already falling behind on credit card payments, car loans and mortgages — and soon student loan payments too.

Plus, when we know we don’t have to pay in full immediately, we’re more likely to overspend.

“It creates a potentially dangerous situation,” Bruce McClary, senior vice president of communications at the National Foundation for Credit Counseling, told The Washington Post.

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