{"id":17806,"date":"2024-03-21T21:31:49","date_gmt":"2024-03-21T19:31:49","guid":{"rendered":"https:\/\/www.liberalglobe.com\/?p=17806"},"modified":"2024-03-21T21:31:49","modified_gmt":"2024-03-21T19:31:49","slug":"over-15-million-americans-take-out-loans-to-buy-food-staples","status":"publish","type":"post","link":"https:\/\/www.liberalglobe.com\/?p=17806","title":{"rendered":"Over 15 million Americans take out loans to buy food staples"},"content":{"rendered":"\n

As incomes have collapsed and food prices have soared, more and more Americans are borrowing to meet basic nutritional needs. <\/p>\n\n\n\n

Last year, about 15 million consumers \u2014 or 6.5% of the U.S. population \u2014 reported using BNPL loans to pay the grocery bill or manage their weekly food expenses, according to research by PYMNTS Intelligence (New reality Check: The Paycheck-To-paycheck report<\/a>) are, about 5.4% of the households that used BNPL loans to buy groceries were low-income \u2013 indicating that the crisis and the middle income classes are beginning to be affected. <\/p>\n\n\n\n

That means there is a small share of higher earners, those who made more than $100,000 a year, using the popular pay-in-4 installment loans to buy food each month.<\/p>\n\n\n\n

The trend may intensify this year as consumers in all income groups continue to face rising prices \u2013 evidence that inflation is ignoring the Fed’s measures.<\/p>\n\n\n\n

Sacrifices\u2026. in the food<\/strong><\/p>\n\n\n\n

BNPL loans offer a short-term solution, allowing buyers to spread payments over time. However, while food prices moderated in February, they remain 22.3% higher than 2020 levels.<\/p>\n\n\n\n

Rising costs have forced households at every income level to make sacrifices. For example, half of consumers earning more than $100,000 said they cut back on unnecessary spending at the grocery store.<\/p>\n\n\n\n

More than 60% of those earning less than $100,000 a year said they had to cut back on spending because of high food costs. To save money, more people said they turned to discount stores.<\/p>\n\n\n\n

Others decided to buy lower quality foods such as non-organic products for more affordable options. Even enjoying a meal at a restaurant has become more expensive. On an annual basis, the non-home food inflation index rose 4.5% in February.<\/p>\n\n\n\n

But not everyone uses BNPL, making big food chains like McDonald’s think about it in order to lure consumers.<\/p>\n\n\n

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90% of McDonald’s restaurants in the U.S. offered breakfast or meal packages priced under $4. McDonald’s plans to offer even more deals this year to attract consumers, especially those hit hardest by inflation.<\/p>\n\n\n

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One third of high earners live paycheck to paycheck<\/strong><\/p>\n\n\n\n

In January, more than half of Americans said they were living paycheck to paycheck \u2014 meaning they have no savings \u2014 a sign that the rising cost of living may be affecting consumers’ financial stability, according to a report by PYMNTS Intelligence.<\/p>\n\n\n\n

The share of those living paycheck to paycheck spans income brackets and generations. At least three-quarters of those earning less than $50,000 a year and about two-thirds of middle earners \u2014 earning between $50,000 and $100,000 \u2014 were living paycheck to paycheck in January.<\/p>\n\n\n\n

Add to that the 36% making more than $200,000 who said they struggled to make ends meet. Those who did not use BNPL loans relied on credit cards to pay bills for food expenses.<\/p>\n\n\n\n

A third of all U.S. consumers, 31 percent, said they used a traditional credit card to buy groceries in February, according to data from PYMNTS.<\/p>\n\n\n\n

BNPL is a ‘double-edged sword’<\/strong><\/p>\n\n\n\n

While getting a short-term payday loan in four installments to buy groceries may seem convenient, borrowers should be careful not to over-rely on this type of lending.<\/p>\n\n\n\n

    \n
  1. There is the risk of excessive expenses and non-satisfaction of multiple loan claims.<\/li>\n\n\n\n
  2. While BNPL is generally interest free for smaller purchases, you could be charged interest for larger loans. Although BNPLs are not a regulated market, late payments can seriously affect creditworthiness.<\/li>\n<\/ol>\n\n\n\n

    BNPLs are a double-edged sword that can quickly backfire if not used properly.<\/p>\n","protected":false},"excerpt":{"rendered":"

    As incomes have collapsed and food prices have soared, more and more Americans are borrowing to meet basic nutritional needs. Last year, about 15…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[390,819],"tags":[497,2603,5272,5273,243,2541,70],"class_list":["post-17806","post","type-post","status-publish","format-standard","hentry","category-politics","category-usa","tag-cost-of-living","tag-food","tag-food-staples","tag-income-limits","tag-inflation","tag-prices","tag-usa"],"_links":{"self":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/17806","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17806"}],"version-history":[{"count":1,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/17806\/revisions"}],"predecessor-version":[{"id":17810,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/17806\/revisions\/17810"}],"wp:attachment":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17806"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17806"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17806"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}