Ask an Expert: Should I Use 'Buy Now, Pay Later' for Groceries?

These programs can seem like good alternatives to high-interest credit cards and payday loans, but are they really?
Woman pays via phone at supermarket checkout.

We're back again, deal-seekers! This time we're addressing a dilemma from a reader who's feeling the squeeze of rising grocery costs on their wallet, like many of us are. Check out our latest column on whether "buy now, pay later" groceries make sense. We also share ways to save on food necessities in general.

Should I Use 'Buy Now, Pay Later' for Groceries?

The Dilemma

Dear Ask an Expert,

My grocery bills have been going up a lot recently. I was thinking of using a buy now, pay later service because I've heard it makes it easier to pay for my groceries. Is that a good idea?


Feeling the Food-Bill Pinch

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Our Advice

Buy now, pay later options have been in the news for a few years now, and it doesn't seem like they're going away anytime soon. We've already investigated the best buy now, pay later sites, as well as Target's BNPL options, but now even more are becoming available. For example, Apple recently launched its Apple Pay Later program.

Using buy now, pay later for groceries may be a good alternative to high-interest credit cards and payday loans, but BNPL services have their own drawbacks.

However, the foray into buy now, pay later groceries is a relatively new trend. According to a recent report from Adobe Analytics, groceries' share of buy now, pay later transactions grew 40% during the months of January and February 2023. So it's no surprise that more households may be looking into this method of paying for necessities, but that doesn't mean it's a good idea.

Buy Now, Pay Later Groceries Can Equal More Debt

If you're on a very tight budget, then trying buy now, pay later for grocery shopping can seem like a good short-term solution. But people who use this payment method may be postponing their financial issues and compounding them, making them harder to get out of later.

SEE ALSO: How to Save Money on Groceries: 10 Tips You Should Try

So with the risk of compounding debt, what's driving the surge in buy now, pay later groceries? Well, a lot of it comes down to higher prices. For example, the inflation rate was 6% higher in February 2023 compared to the previous year, but grocery prices rose 10.2% over the same period. Due to inflation, most households are feeling at least some strain on their finances. Yet when it comes to buy now, pay later grocery solutions, the people who tend to use them might be the ones who are feeling the monetary impact the most.

According to a report by the Consumer Financial Protection Bureau, buy now, pay later users are more financially distressed than nonusers in general. The same report also noted that these users may be more likely to use other kinds of credit products, such as payday loans as well as credit cards. And using multiple types of these services and products can cause debt to snowball and quickly grow to unmanageable levels for those already experiencing financial difficulties.

Buy Now, Pay Later Has Risky Drawbacks

If you're already in a financially strapped position, you may think using buy now, pay later for groceries is an easy way to shop for necessities without having to worry about incurring credit card debt. After all, at least with buy now, pay later options, you don't have to be concerned about interest accruing, right? While that's true for the most part, you'll still have issues if you can't pay your loan off on time. You may start accruing interest when you miss a payment, for example. Or you may be hit with huge late fees that make the so-called simple solution a bigger part of the problem.

If you do try buy now, pay later for groceries, be conscious of how much you're spending to avoid falling into a debt trap.

As one consumer noted in Bloomberg, these services may help for a little bit, but you end up being stuck with a grocery bill for a couple of months. When you need to buy groceries again, you still have the bill from the last trip you made.

Further, some people are using buy now, pay later programs to bridge the gap between their paychecks, but this can turn into a vicious cycle. At best, one round of buy now, pay later gets paid off and another one starts soon thereafter. It becomes a never-ending, revolving door of taking and paying loans. Then these reasonable grocery bills can balloon into owing thousands in some cases. That can add to other debts and make a bigger financial hole that feels impossible to dig out of.

Is Using Buy Now, Pay Later for Groceries a Good Idea?

Whether to use buy now, pay later services for groceries is going to depend on your individual situation. If you're in a tough spot but are mostly on track, then choosing buy now, pay later for one or two grocery trips is a reasonable short-term solution. But it's important to remember that buy now, pay later can make it easy to overspend. So if you do use it for a round of groceries, it's best to buy cheaper items and perhaps even less than you usually would to cut back on that temptation.

Couple uses phone while shopping for groceries.

Other Ways to Save on Groceries

If your household is having a hard time finding the funds to afford groceries, all is not lost. You can take multiple steps to save money on groceries in general.

Shop Generics

There's a good chance that if you've been feeling the squeeze on your wallet long enough, you've already started shopping for generics over name-brands. But if you haven't — or if you're still buying some big-brand products — switching to generics can help make your groceries more affordable. Where you shop matters, too. For example, buying Aldi's store brands is likely going to be far cheaper than if you were to shop at Whole Foods and buy their store brands instead.

SEE ALSO: 5 Helpful Ways to Combat Grocery Store Food Shortages

Meal Plan Around the Sales

Most grocery stores have regular sales, often on a weekly basis. Plan meals around the items that are going to be on sale and then shop for those items specifically. If you like a particular meal, buy enough ingredients to make it multiple times, as long as that fits into your budget. And freeze whatever you can so you don't have to fear items going bad.

Try Cash Back Apps

Cash back apps have become popular over the last decade and especially during the last few years, with inflation seeming to run rampant. But apps like Ibotta and Checkout 51, among others, are great for earning cash back on your grocery purchases. They're easy to join and use, for one thing. And they might add a little extra work to your trip — you'll need to save offers and upload receipts, for example — but it can be well worth the extra time, as those rewards can add up.

Use Coupons

Want to become a coupon pro? First, download apps for any stores you shop at frequently, whether it's Target or a grocery store chain local to your area. If there's an app available, it's likely a good idea to download it, as many stores are leaning in to digital coupons now rather than distributing paper ones. Once you download these apps and create accounts, you can browse digital offers, save them to your account, and then shop like normal. During checkout, provide the phone number associated with your account — or use the app to pay or scan a bar code within the app — to redeem your saved offers.

Plan meals around the grocery items that are going to be on sale, and then shop for those items specifically.

What's good about these apps is that stores are also choosing to pay attention to your purchases and offer coupons tailored to your shopping habits. As long as you use the apps on a consistent basis and save offers you're interested in, you can save even more on items you buy regularly.

Look for a Food Pantry

Food pantries may be easier to find in some areas over others, but they're worth seeking out if you're feeling particularly strapped. Even if you only pick up a couple of items to help stretch whatever's currently in your pantry, that can go a long way toward reducing the stress of shopping for necessities. Try to look for these food pantries on local government websites as options for helping those in need. If you're not having any luck there, you can also reach out to religious organizations in your area to see if they have their own pantries or assistance programs.

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Julie Ramhold
Senior Staff Writer/Consumer Analyst

Julie's work has been featured on CNBC, GoBankingRates, Kiplinger, Marketwatch, Money, The New York Times, Real Simple, US News, WaPo, WSJ, Yahoo!, and more. She's extolled the virtues of DealNews in interviews with Cheddar TV, GMA, various podcasts, and affiliates across the United States, plus one in Canada.
DealNews may be compensated by companies mentioned in this article. Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).


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