Should You Be Using ‘Buy Now, Pay Later’ To Purchase Your Groceries?

The retail industry is always changing, as are the ways that consumers pay for their purchases. In recent years, there’s been a surge in the so-called “buy now, pay later” business.

At first, people took advantage of the flexible payment plans (usually four installments over a few weeks) to make fairly large purchases without incurring the interest associated with putting it all on a credit card. Now that inflation is making groceries increasingly unaffordable for many families, though, a growing number of people are resorting to BNPL for online food purchases.

What’s the harm?

On the surface, these purchase plans seem innocuous enough. As long as you make the payments on time, there’s usually little or no interest added. If you miss an installment, though, you might be on the hook for some serious additional charges.

That’s not the only reason it’s probably not advisable to overuse BNPL options, particularly on groceries, if you can avoid it.

Because of the convenience factor, many consumers spend more than they can afford, which negatively impacts their financial situation. Furthermore, if you get behind and miss payments, those added fees can also translate into a credit score reduction.

A troubling trend?

The very fact that so many people are resorting to this option for necessities like groceries might be a sign of growing desperation in an uncertain economy. Over the first two months of 2023, data shows that there have been about 40% more grocery purchases made via BNPL platforms than during the same period last year.

Even though the annual inflation rate cooled to 6% last month, the cost of groceries increased by more than 10%.

There is a possible upside to the trend, though: Consumers might be buying in bulk to make the most of discounts and other savings.

Chris Agee March 25th, 2023

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