Recent studies show that more and more people are going into debt to finance groceries and other basic staples such as rent and utilities. Leading the trend are retirees.
Millions Buying Groceries on Credit
A report by the Urban Institute found that millions of Americans are using credit cards to pay for groceries. That is not financially significant if buyers pay their balances on time. However, the report found that more than one-fourth of working-age adults missed a payment or could not pay the balance in full.
“When someone buys food with a credit card and only makes the minimum payment, they are turning a short-term necessity into long-term debt,” Dean Ferraro, co-founder and CEO of Longhouse Wealth Management, told SavingAdvice.
Northern Virginia debt and bankruptcy attorney Ashley Morgan of Ashley F. Morgan Law agrees.
“Temporary debt slowly becomes permanent debt when necessities are financed month after month,” she told SavingAdvice.
The report also found that nearly 20% of working-age adults said they had dipped into long-term savings, including emergency funds, at least once in the previous 12 months to pay for groceries. That information was similar to research reported by the Federal Reserve Bank of New York.
More Debt = Longer Payoff Time
“In a survey Achieve conducted this spring, they found that 53% of American consumers are carrying credit card balances to cover the rising cost of essential expenses, including groceries,” says Austin Kilgore. He is an analyst with the Achieve Center for Consumer Insights.
“Moreover, 57% of consumers estimate it would take six months or longer to pay off all their short-term, unsecured debt like credit cards, Buy Now Pay Later loans, personal loans, and medical debt,” Kilgore tells SavingAdvice.
About one in 10 adults relied on Buy Now, Pay Later loans to cover grocery purchases, and roughly one-third of those borrowers missed a payment during the past year, according to the Urban Institute.
“Buy Now, Pay Later for groceries worries me even more,” says Morgan. “Breaking groceries into four payments does not make food cheaper; it is tricking your brain into thinking you can afford a bigger purchase. Using BNPL for groceries just means next month’s paycheck is already committed before the month even starts.”
More Older Adults Borrowing to Pay Basic Living Expenses
Rising debt can be a greater problem for many retirees because they live on a fixed income.
A late May report from the commercial collections agency the Kaplan Group found that “Seniors 70+ are now the fastest-growing group of borrowers, with debt rising 4.22% YoY (year-over-year) and 36.2% over five years.”
Kaplan also reported that over 60% of households headed by someone 60 or over carried debt. If that debt is for groceries, food insecurity may follow.
Of adults 60 or over dealing with food insecurity, 52% characterize their health as fair to poor, according to West Health Mosaic, a research platform. Scrimping on or being unable to pay for groceries leads to greater healthcare costs, according to Mosaic. Trying to pay those healthcare costs leads to skipping more meals.
Working-Age Adults on a Similar Credit Card Track
According to Schroders’ 2026 US Retirement Survey, 33% of Americans currently investing in a workplace retirement plan, such as a 401(k), have credit card debt exceeding their retirement savings. Over half of those respondents, 55%, say they cannot save 10% of their income for retirement. A further 69% report they think retirement is unattainable due to rising costs for basic living expenses.
A LendingTree survey issued in January found that 60% of respondents said they were worse off or the same as the year before. Half of those surveyed added some form of debt last year, according to the report. The leading source of new debt was credit cards, accounting for 23% of the total. Another 11% took on a personal loan. Groceries and household expenses were the toughest spending categories to manage.
Consumer Spending Shift
Many consumers are trying to cut grocery spending, according to data compiled by Big Chalk, an analytics and marketing company. Its Trade-Off Consumer 2026 report found that 93.4% of households profiled plan to cut grocery spending. Trade-off consumers are those people who actively cut household spending to manage family finances, according to Supermarket News.
A June analysis by Bain & Company revealed that shoppers have been buying about 2% fewer groceries each month since February. At the same time, prices have climbed 2% to 3% year-over-year.
“Trade-Off Consumers – out of necessity, not discipline – are much more likely to trade down on a category-by-category basis,” noted Big Chalk’s Rick Miller in the report. “. . . nearly all of them are trying to cut grocery spending, and roughly 72% of them are cutting their dining out budgets.”
A Sign of Stress
SavingAdvice asked self-described Lifestyle Creator Janiece Okpobiri, who coaches financial stability, if the increased use of credit cards to buy groceries was a matter of convenience or necessity.
“For the families I hear from, it is a crunch, and it shows up in a specific way. They are not charging a big grocery haul,” says Okpobiri. “They are charging the third trip of the week, the one that happens because the first two were not planned and nothing in the house goes together. Convenience and crunch are the same event for a lot of households right now.”
Morgan tells SavingAdvice that buying food on credit is a last resort for some families.
“Groceries have become one of the last flexible expenses in many household budgets,” she says. “Instead of using credit cards, some people are using programs like BNPL because it doesn’t feel like real debt. But, in reality, using credit cards or BNPL for regular expenses like groceries means people are struggling to make ends meet. When there is nothing left at the end of the month, the grocery bill often ends up on a credit card simply because there are no other options.”
Options for Trimming Grocery Bills
“Food is the easiest line to cut and the one that costs you the most in health and morale,” says Okpobiri. “Cut the subscriptions, the insurance you never re-shopped, the payments you stopped noticing. Then use the food budget to build a pantry instead of just surviving the week.”
Those we contacted recommend a strategic plan for grocery shopping.
“Buy food when it is cheap instead of when you need it. That sounds glib until you do it once. I cut our grocery budget in half by learning to preserve, and the mechanism is not frugality; it is timing,” notes Okpobiri. “Canning and freeze-drying let me buy at the bottom of the price curve and eat from it for months. A flat of strawberries in June costs a fraction of what the same fruit costs in January, and the difference is a skill, not a coupon.”
All the experts we talked to emphasized the importance of planning grocery shopping with a budget.
Ferraro suggests using technology to shop.
“AI tools such as ChatGPT can also help families build a realistic weekly meal plan and shopping list based on a specific budget, family size, dietary restrictions, allergies, and foods they already have at home,” he says. “A family could ask it to create seven dinners for four people under a set dollar amount.”
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