American Households Struggle with Credit Card Debt as Grocery Costs Surge

American households are increasingly relying on credit cards and short-term financing tools like 'Buy Now, Pay Later' (BNPL) to meet grocery expenses, as rising food prices strain budgets. According to a Urban Institute study, over 25% of working-age adults who used credit cards for groceries last year failed to repay their balances in full, either making only minimum payments or missing them entirely. The survey of more than 7,500 adults found that one-third of BNPL users missed payments, while nearly 1 in 20 turned to payday loans for food purchases. The data reveals a growing financial vulnerability among consumers, particularly low-income groups.

■Food prices rose 2.7% in the past year and are up nearly 32% from pre-pandemic levels.

■The share of adults unable to make minimum credit card payments after grocery purchases increased from 7.1% in 2023 to 8.7% in 2025, with the most significant jump seen among families earning 200% to 400% of the federal poverty level (from 9.3% to 12.3%).

■Low-income adults were twice as likely to miss BNPL payments (50%) compared to high-income counterparts (25%).

■About 20% of working-age adults dipped into long-term savings to afford food, signaling potential risks to financial stability.

The growing reliance on credit and depletion of savings underscores mounting pressure on household finances, hinting at possible consumption pullbacks and broader credit risk concerns in the near term.