Millions of Americans are increasingly relying on credit cards and loans to buy groceries due to rising living costs, according to research by the Urban Institute. More than 25% of working-age adults using credit cards for groceries reported being unable to pay their balance in full or have missed minimum payments. Additionally, about 10% utilized “buy now, pay later” loans for grocery purchases, with one-third of this group missing payments last year. Approximately 20% of these adults have withdrawn from long-term savings, such as emergency funds, to cover grocery costs over the past year. Grocery prices have surged by 32% over the past five years, intensifying financial pressure on households already struggling with inflation and stagnant wages.
Why It Matters
The findings highlight a growing financial distress among American households, particularly low- and middle-income families who are disproportionately affected. With food prices continuing to rise, many households face tough choices between paying for essentials and managing debt. Historical data indicates that inflation has outpaced wage growth, leading to decreased purchasing power. Additionally, enrollment in the Supplemental Nutrition Assistance Program (SNAP) has declined, further exacerbating challenges for families who rely on such support to meet their nutritional needs.
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