‘All of us are going to pay’: 30% of Americans are taking out BNPL loans to pay for groceries, and it’s probably going to cost you
A Washington University study found that as more consumers finance their purchases, the cost of goods goes up for all.
Thirty percent of Americans are using buy now, pay later loans to cover grocery expenses, a trend that may lead to higher grocery prices, economists warn. According to a study from the University of Washington in St. Louis, retailers could raise prices and reduce inventory as more consumers turn to buy now, pay later for necessary purchases.
Lending Tree's survey found that 29% of U.S. consumers use these loans for groceries, a number that has nearly doubled in two years. The growing use of buy now, pay later for necessities is a growing concern as consumers face increasing healthcare, childcare, and inflation costs. In the study, researchers found that retailers could boost prices to compensate for merchant fees associated with these transactions, effectively making all consumers pay more.
The shift towards financing necessities may also pressure retailers to cut margins, potentially limiting consumer choices. As buy now, pay later is largely unregulated and not reported to credit agencies, some consumers may accumulate "phantom debt" without knowing it. While the average debt is small, at around $135, the potential dangers for both consumers and retailers persist.
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