Buy now, pay later usage for groceries nearly doubles as consumers struggle with food costs

Services like Klarna, PayPal, Affirm and Afterpay have surged in popularity in recent years

More consumers in today’s economic environment are financing basic necessities like food through buy now, pay later financing options.

It’s a reality that highlights “how bifurcated the health of the consumer is today,” according to Arun Sundaram, vice president and senior equity analyst at CFRA Research.

Today, a growing number of buy now, pay later users are utilizing these short-term loans to purchase groceries. Data from an April LendingTree’s report shows that 25% of such users have used the service to buy groceries, up from 14% a year ago.

“Lower-income households are facing much tougher financial choices than middle- and upper-income families,” Sundaram told FOX Business. “When short-term cash flow takes priority over long-term financial stability, it can signal deeper financial stress that may have ripple effects down the road.”

Lending services such as Afterpay, Klarna, Affirm and PayPal have surged in popularity in recent years as cash-strapped consumers looked to stretch their wallets. Traditionally, they have been utilized for big-ticket items, allowing consumers to make purchases and pay for them in installments, often with no interest or fees.

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