Buying groceries has always been one of the most basic household expenses. Yet for a growing number of Americans, paying for food now involves credit cards, Buy Now, Pay Later plans, or even payday loans.

New research shows that rising food prices, tighter household budgets, and changes to federal food assistance programs are pushing families to finance everyday meals with borrowed money.

While this may provide short-term relief, it often creates a much larger financial burden that can last for years.

The Rise of Grocery Debt

A recent Urban Institute survey on family well-being and basic needs found that grocery costs have become difficult to manage for many working-age adults across the United States. During the past year, more than one in three working-age adults (34.9%) used a credit card to buy groceries.

Freepik | pch.vector | Over one-third of US working-age adults now use credit cards to afford groceries amid rising costs.

The findings also reveal that many households struggled to repay those balances:

1. 34.9% paid their credit card bill in full.
2. 19.6% paid less than the full balance while making at least the minimum payment.
3. 8.7% did not consistently make the minimum payment.
4. Nearly 1 in 10 borrowers used Buy Now, Pay Later (BNPL) services to purchase food.

These numbers suggest that grocery shopping has shifted from a routine household expense to one that increasingly relies on borrowed money.

Rising Costs Are Stretching Budgets

Food prices continue to climb, making it harder for many families to keep up with everyday expenses. According to the Bureau of Labor Statistics, grocery prices increased 2.7% between June 2025 and June 2026.

Several major food categories recorded noticeable increases over the same period:

Meats, poultry, fish, and eggs: up 2.6%
Fruits and vegetables: up 5.3%

As food prices outpace many household budgets, families often exhaust their available cash before the month ends. Instead of reducing grocery purchases, many turn to credit simply to keep food on the table.

The Urban Institute report shows that repayment challenges are not limited to lower-income households. Even high-income working-age adults who used credit cards for grocery purchases reported difficulty paying off those balances.

Kassandra Martinchek, senior research associate at the Urban Institute and one of the report's authors, explained the growing concern.

"There is a substantial portion of people all around us who are having trouble being able to afford groceries and meet their basic needs."

The findings suggest that higher grocery costs are affecting households across a broad range of income levels rather than one specific financial group.

Using Savings and High-Cost Loans

Credit cards are only one way households cover grocery expenses.

The Urban Institute found that during 2025, 19.6% of working-age adults withdrew money from non-daily savings to pay for groceries. Another 5.2% relied on payday loans.

Payday loans may appear manageable because lenders often charge fees such as $15 for every $100 borrowed. Once converted into an annual percentage rate, however, borrowing costs can climb into the triple digits. Many borrowers end up taking another payday loan simply to repay the first, creating a difficult cycle to escape.

Meanwhile, Federal Reserve data shows that credit card accounts carrying a balance averaged approximately 22.15% interest as of May, making revolving debt increasingly expensive.

SNAP Changes Add Pressure

Freepik | Relying on high-interest debt for daily groceries drains monthly budgets and ruins long-term financial security.

Many households are also adjusting to changes in federal food assistance.

Signed into law in July 2025, the One Big Beautiful Bill Act significantly revised the Supplemental Nutrition Assistance Program (SNAP). The legislation introduced stricter work requirements, narrowed eligibility, and shifted a greater share of program costs to individual states.

The effects are already visible.

According to the Center on Budget and Policy Priorities, more than 4.5 million people were removed from SNAP rolls between July 2025 and April 2026. The organization also reported that in 19 states with available data, more than 1 million children have lost SNAP food assistance since the law took effect.

As fewer households qualify for food assistance, many have little choice but to rely on personal savings or borrowed money to cover grocery bills.

The Long-Term Cost of Financing Food

Using credit for groceries creates a financial challenge that extends well beyond the checkout line.

Martinchek warned that revolving debt can keep families under financial pressure long after the groceries have been consumed.

"They can have even more trouble achieving financial stability in the future. This can have a long tail, especially if folks continue to not make minimum payments in ways that undermine their long-term creditworthiness."

According to the Bureau of Labor Statistics Consumer Expenditure Survey, the average household spent $6,224 on food at home during 2024.

If a family charged half of that amount ($3,112) to a credit card with a 22% interest rate, the financial impact could be significant.

Under a standard minimum payment structure that combines interest plus 1% of the balance, the first monthly payment would be approximately $88.17. Of that amount, about $57.05 would cover interest, while only $31.12 would reduce the principal balance.

Using Bankrate.com's minimum payment calculator, paying only the required minimum each month would keep the debt active for nearly 20 years and generate about $5,000 in interest charges—all for groceries that were purchased years earlier.

High-interest debt for everyday groceries creates financial strain that extends well beyond monthly budgets. Interest payments reduce the money available for savings, retirement, education, and other long-term goals.

Growing dependence on credit cards, Buy Now, Pay Later plans, and payday loans also reflects the difficulty many working households face in covering basic living expenses. Without improved affordability, more families could remain burdened by debt tied to everyday food purchases.