New data suggest grocery affordability is becoming a cash-flow problem, as more consumers turn to credit cards, savings, and buy now, pay later to manage everyday food purchases.
Grocery inflation is demonstrably cooling; affordability has been improving slightly, even if it is beginning to level off.
But in this economy, that relief isn’t evenly felt. The affordability problem is far from over.
And now we’re getting a revealing, potentially troubling signal from the point of sale…
A growing body of data suggests consumers are increasingly relying on credit cards, savings and even installment products (“buy now, pay later,” or BNPL) to pay for groceries. Now, the trend doesn’t mean every shopper using a credit card is struggling; plenty of households pay their balances each month to take in rewards. But nevertheless the numbers indicate a meaningful share of households are using credit as a cash-flow tool for an expense that traditionally comes out of current income.
The industry will have to come to grips with this as we endeavor to understand what “improving affordability” actually looks like after so many years of higher prices.
Here’s What the Studies Show
The big picture comes to us courtesy of the latest Federal Reserve Payments Study. Credit card payments increased by 16.2 billion transactions between 2021 and 2024, reaching 67.1 billion. Debit transactions increased by 13.8 billion to 120.6 billion during the same period. It was the first measured three-year period since 2000 in which credit card payments grew by more transactions than debit. Debit still represented 64% of all card payments in 2024, but that was down from 68% in 2021.
Consumer preferences look to be heading in the same direction. Fed research released this year found Americans now make an average of 16 credit card payments per month compared with 15 debit card payments. Credit and debit together account for two-thirds of all consumer payments. Meanwhile, 38% of consumers now say credit is their preferred method for paying in person, up from 24% in 2016 and just two percentage points behind debit at 40%.
Now, I’d be remiss if I didn’t say that the Fed’s research and data cover the entire economy, broadly. It’s recent research from the Urban Institute that drills down on the trend directly in the food business.
Among working-age adults surveyed in December 2025, 34.9% used a credit card to buy groceries and paid the bill in full. But another 19.6% used credit for groceries, carried a balance and made at least the minimum payment, while 8.7% did not always make even the minimum payment. Combined, more than one in four working-age adults purchased groceries with credit cards while experiencing at least some degree of repayment difficulty or unwillingness.
The latter number, failing to make the minimum payments, is also moving in an ominous direction. The share of working-age adults who used credit cards for groceries and did not always make the minimum payment increased from 7.1% in 2023 to 8.7% in 2025.
The relationship with food prices is particularly telling.
Grocery Prices Are an Integral Part of This Picture
A little more than half — 51.3% — of working-age adults surveyed said their grocery costs had increased “a lot” during the previous 12 months. Among that group, 12.4% used credit cards for groceries and did not consistently make the minimum payment. That compares with 5.2% among consumers who said grocery costs increased only a little and 4.8% among those who reported no increase.
Unsurprisingly, income looms large here. More than half of low- and moderate-income adults who used credit cards for groceries did not always pay the entire balance, compared with just over one-third of higher-income adults.
As unsettling as these numbers are, credit card usage is only part of the story. As we get further in, it should be noted that we don’t have data on what kind of groceries, specifically, these respondents are buying.
Nearly 10% of working-age adults used buy now, pay later services for groceries, according to Urban Institute. Among those consumers, 34.8% missed a BNPL payment. Another 19.6% tapped savings that were not intended for everyday expenses to buy groceries, while 5.2% used proceeds from a payday loan. The findings came from a nationally representative survey of more than 10,000 adults, including more than 7,500 between ages 18 and 64.
Separate LendingTree research points in the same direction. Among BNPL users, 29% said they had used installment financing to buy groceries, up from 25% a year earlier and just 14% two years earlier. Grocery use climbed to 38% among Gen Z BNPL users, 34% among users with children under 18 and, interestingly, 33% among users earning at least $100,000 annually.
That last figure helps explain why this should not simply be interpreted as a low-income story. Higher grocery costs are just one of the many economic pressures and stressors changing household financial management all across the income spectrum.
And prices remain elevated even as inflation moderates – somewhat.
The July Consumer Price Index showed food-at-home prices actually declined 0.1% from June, but they remained 2.7% higher than a year earlier. Fruits and vegetables were up 5.1% year over year, nonalcoholic beverages 4.1%, cereals and bakery products 2.7%, and meats, poultry, fish and eggs 1.9%. Dairy and related products were the exception, declining 0.5%.
Of course an important distinction applies: “Slower inflation” means prices are rising more slowly. It does not by any means reverse the cumulative increases households absorbed over the past several years.
That’s why I think we’re moving into a new “chapter” in the affordability saga of the past six years.
What Can I Afford to Buy? When Can I Afford to Pay for It?
During the worst of food inflation, shopper adaptations were easy to see in the basket: more private label, increased promotion hunting, channel switching, smaller purchases, tougher calls on discretionary items. This Federal Reserve and Urban Institute data on payment behavior suggests another “adjustment” is in the offing.
Now, we should be careful about how far we take this conclusion. I don’t think this data means America is broadly financing its grocery tab. After all, nearly 35% of working-age adults in the Urban Institute study used credit cards for groceries and paid those bills in full. All the rewards, convenience, and protections that can make them preferable even for financially comfortable households.
But it’s indisputable that carried balances, missed minimum payments, savings drawdowns, and BNPL for food are different signals entirely.
Taken together, the data suggest grocery affordability has become a household cash-flow problem as much as a shelf-price problem.