One in ten American adults is taking out loans to buy food. A third of them missed a payment on those loans last year. And Congress just threw five million people off food stamps. Everything is fine. America is thriving.
People Are Financing Bread and Milk Like It's a Boat
The Urban Institute, a nonpartisan think tank, released new research this week showing that roughly one in ten working-age adults used buy-now-pay-later loans to cover their grocery bills last year. Of those people, about a third missed a payment. Let that land for a second. Americans are taking out installment loans for groceries and then failing to make the payments on those installment loans for groceries.
According to CBS News, more than a quarter of working-age adults who used credit cards for groceries either couldn't pay their balance in full or missed their minimum payment entirely. The share missing minimum payments rose 1.6 percentage points since the Urban Institute last ran these numbers in 2023. That sounds incremental. It is not. When you apply that percentage shift to the full U.S. adult population, you are talking about millions of additional people sliding into financial distress over two years just from trying to keep their refrigerators stocked.
About 20% of working-age adults also dipped into long-term savings, think emergency funds and retirement accounts, at least once in the past 12 months specifically to pay for groceries, the research found. That money was not supposed to be for groceries. That money was supposed to be for emergencies. Apparently, being unable to afford food now qualifies.
The Late Fee Is Not the Worst Part
Here is how this trap works in practice. You charge groceries to a credit card. You cannot make the minimum payment. According to NerdWallet, as cited by CBS News, that first missed payment costs you up to $30. Miss it again and you're looking at $41 per subsequent offense. But the real gut punch is the penalty APR, a higher interest rate of around 30%, which kicks in on top of an average existing APR that already sits at about 24%.
So you borrowed money to buy food. You couldn't pay it back. Now you owe more money at a higher interest rate. And you still need to buy food next week. Kassandra Martinchek, a co-author of the Urban Institute study and a public policy expert, told CBS News that this cycle creates a compounding trap: "Families still need to eat. They will still need to pay for their basic needs. Now they have the additional burden of also needing to repay debt."
Low- and middle-income adults are bearing the worst of it. The Urban Institute found that about 12% of lower-income people using credit cards for groceries missed a minimum payment last year, triple the rate for higher-income consumers. Lower-earning households were also four times as likely to miss a buy-now-pay-later payment. Shocking news that the people with the least money are having the hardest time paying their bills.
Five Years of Prices Going Up, Two Years of Wages Falling Behind
Grocery prices have jumped 32% over the past five years, according to the Urban Institute. Thirty-two percent. If you were buying $200 worth of groceries in 2021, that same cart runs you about $264 now. Wages have not kept pace. A May CBS News poll found that more than three-quarters of Americans say their incomes aren't keeping up with inflation. Recent data has confirmed that inflation is outpacing wage growth, which is the clinical way of saying people are getting poorer in real terms while working the same jobs.
In 2026, price increases have reaccelerated further, driven in part by the Iran war and its knock-on effects on energy costs. CBS News reports that consumer prices have hit their highest level in more than three years. The Urban Institute's findings are based on a December survey of 7,500 adults between 18 and 64, so the picture they are capturing may already be worse than what the numbers show. That survey predates the latest round of price spikes.
Congress Made It Worse on Purpose
While millions of Americans were quietly maxing out credit cards to buy pasta and cereal, Congress passed the "One Big Beautiful Bill Act" in 2025, which introduced new work requirements for SNAP, the federal food assistance program. The results are now showing up in the data. CBS News reports that SNAP enrollment dropped from roughly 42 million people to about 37 million as of March 2026, a decline of nearly five million people in one year.
Five million people. Gone from the program. Not because they suddenly got richer. Not because grocery prices went down. Because Congress added procedural hurdles that kicked people out or made them too exhausted and overwhelmed to stay enrolled. These are the same people who are, according to the Urban Institute, four times as likely to miss a food loan payment as higher-income households. The people with the least cushion just had their cushion legislatively removed.
"For low- and moderate-income families, groceries are a really big portion of their budget, and so when food prices increase, they have much less breathing room to accommodate that," Martinchek told CBS News. Less breathing room. That is one way to describe a situation where people are financing food on short-term loans and missing those payments at triple the rate of their wealthier neighbors.
The Dingo Take
Let's be specific about what is happening here, because vague anxiety about "the economy" lets the people responsible off the hook. Congress, controlled by Republicans who ran explicitly on cutting food assistance, passed a law that removed five million people from SNAP during a period when grocery prices are up 32% and millions of Americans are already missing loan payments on food. This was not an accident or an oversight. It was the policy. The predictable, documented, inevitable result of that policy is that people who were already struggling to eat are now struggling to eat while also accumulating debt they cannot service.
The buy-now-pay-later angle is worth sitting with, because it represents something genuinely new and ugly in American economic life. BNPL products were sold to consumers as a convenient, interest-free way to spread out the cost of a couch or a laptop. They are now a primary mechanism by which working-class Americans are financing their weekly trip to the grocery store. When a third of those people miss a payment, they are not being irresponsible. They are being squeezed from every direction simultaneously, by prices, by stagnant wages, by reduced benefits, by penalty interest rates, by late fees on the penalty interest rates.
Nobody financing groceries on a short-term loan and missing the payment is making bad choices. They are making the only choices available to them. The bad choices were made in Washington, years ago and again last year, by people who will never in their lives have to wonder how they are going to pay for dinner.
