Finance

More Americans buy groceries with buy now, pay later loans

Published

3 weeks ago

April 26, 2025

Business Finance News

People shop for produce at a Walmart in Rosemead, California, on April 11, 2025.

Frederic J. Brown | Afp | Getty Images

A growing number of Americans are using buy now, pay later loans to buy groceries, and more people are paying those bills late, according to new Lending Tree data released Friday.

The figures are the latest indicator that some consumers are cracking under the pressure of an uncertain economy and are having trouble affording essentials such as groceries as they contend with persistent inflation, high interest rates and concerns around tariffs.

In a survey conducted April 2-3 of 2,000 U.S. consumers ages 18 to 79, around half reported having used buy now, pay later services. Of those consumers, 25% of respondents said they were using BNPL loans to buy groceries, up from 14% in 2024 and 21% in 2023, the firm said.

Meanwhile, 41% of respondents said they made a late payment on a BNPL loan in the past year, up from 34% in the year prior, the survey found.

Lending Tree’s chief consumer finance analyst, Matt Schulz, said that of those respondents who said they paid a BNPL bill late, most said it was by no more than a week or so.

“A lot of people are struggling and looking for ways to extend their budget,” Schulz said. “Inflation is still a problem. Interest rates are still really high. There’s a lot of uncertainty around tariffs and other economic issues, and it’s all going to add up to a lot of people looking for ways to extend their budget however they can.”

“For an awful lot of people, that’s going to mean leaning on buy now, pay later loans, for better or for worse,” he said.

He stopped short of calling the results a recession indicator but said conditions are expected to decline further before they get better.

“I do think it’s going to get worse, at least in the short term,” said Schulz. “I don’t know that there’s a whole lot of reason to expect these numbers to get better in the near term.”

The loans, which allow consumers to split up purchases into several smaller payments, are a popular alternative to credit cards because they often don’t charge interest. But consumers can see high fees if they pay late, and they can run into problems if they stack up multiple loans. In Lending Tree’s survey, 60% of BNPL users said they’ve had multiple loans at once, with nearly a fourth saying they have held three or more at once.

“It’s just really important for people to be cautious when they use these things, because even though they can be a really good interest-free tool to help you kind of make it from one paycheck to the next, there’s also a lot of risk in mismanaging it,” said Schulz. “So people should tread lightly.”

Lending Tree’s findings come after Billboard revealed that about 60% of general admission Coachella attendees funded their concert tickets with buy now, pay later loans, sparking a debate on the state of the economy and how consumers are using debt to keep up their lifestyles. A recent announcement from DoorDash that it would begin accepting BNPL financing from Klarna for food deliveries led to widespread mockery and jokes that Americans were struggling so much that they were now being forced to finance cheeseburgers and burritos.

Over the last few years, consumers have held up relatively well, even in the face of persistent inflation and high interest rates, because the job market was strong and wage growth had kept up with inflation — at least for some workers.

Earlier this year, however, large companies including Walmart and Delta Airlines began warning that the dynamic had begun to shift and they were seeing cracks in demand, which was leading to worse-than-expected sales forecasts.

Finance

Chase CEO Jamie Dimon says markets are too complacent

Published

2 hours ago

May 19, 2025

Business Finance News

Jamie Dimon, CEO of JPMorgan Chase, leaves the U.S. Capitol after a meeting with Republican members of the Senate Banking, Housing and Urban Affairs Committee on the issue of de-banking on Feb. 13, 2025.

Tom Williams | Cq-roll Call, Inc. | Getty Images

JPMorgan Chase CEO Jamie Dimon said Monday that markets and central bankers underappreciate the risks created by record U.S. deficits, tariffs and international tensions.

Dimon, the veteran CEO and chairman of the biggest U.S. bank by assets, explained his worldview during his bank’s annual investor day meeting in New York. He said he believes the risks of higher inflation and even stagflation aren’t properly represented by stock market values, which have staged a comeback from lows in April.

“We have huge deficits; we have what I consider almost complacent central banks,” Dimon said. “You all think they can manage all this. I don’t think” they can, he said.

“My own view is people feel pretty good because you haven’t seen effective tariffs” yet, Dimon said. “The market came down 10%, [it’s] back up 10%; that’s an extraordinary amount of complacency.”

Dimon’s comments follow Moody’s rating agency downgrading the U.S. credit rating on Friday over concerns about the government’s growing debt burden. Markets have been whipsawed the past few months over worries that President Donald Trump‘s trade policies will raise inflation and slow the world’s largest economy.

Dimon said Monday that he believed Wall Street earnings estimates for S&P 500 companies, which have already declined in the first weeks of Trump’s trade policies, will fall further as companies pull or lower guidance amid the uncertainty.

In six months, those projections will fall to 0% earnings growth after starting the year at around 12%, Dimon said. If that were to happen, stocks prices will likely fall.

“I think earnings estimates will come down, which means PE will come down,” Dimon said, referring to the “price to earnings” ratio tracked closely by stock market analysts.

The odds of stagflation, “which is basically a recession with inflation,” are roughly double what the market thinks, Dimon added.

Separately, one of Dimon’s top deputies said that corporate clients are still in “wait-and-see” mode when it comes to acquisitions and other deals.

Investment banking revenue is headed for a “mid-teens” percentage decline in the second quarter compared with the year-earlier period, while trading revenue was trending higher by a “mid-to-high” single digit percentage, said Troy Rohrbaugh, a co-head of the firm’s commercial and investment bank.

On the ever-present question of Dimon’s timeline to hand over the CEO reins to one of his deputies, Dimon said that nothing changed from his guidance last year, when he said he would likely remain for less than five more years.

“If I’m here for four more years, and maybe two more” as executive chairman, Dimon said, “that’s a long time.”

Of all the executive presentations given Monday, consumer banking chief Marianne Lake had the longest speaking time at a full hour. She is considered a top successor candidate, especially after Chief Operating Officer Jennifer Piepszak said she would not be seeking the top job.

Finance

Stocks making the biggest moves midday: UNH, TSLA, BABA

Published

4 hours ago

May 19, 2025

Business Finance News

Finance

Klarna doubles losses in first quarter as IPO remains on hold

Published

8 hours ago

May 19, 2025

Business Finance News

Sebastian Siemiatkowski, CEO of Klarna, speaking at a fintech event in London on Monday, April 4, 2022.

Chris Ratcliffe | Bloomberg via Getty Images

Klarna saw its losses jump in the first quarter as the popular buy now, pay later firm applies the brakes on a hotly anticipated U.S. initial public offering.

The Swedish payments startup said its net loss for the first three months of 2025 totaled $99 million — significantly worse than the $47 million loss it reported a year ago. Klarna said this was due to several one-off costs related to depreciation, share-based payments and restructuring.

Revenues at the firm increased 13% year-over-year to $701 million. Klarna said it now has 100 million active users and 724,00 merchant partners globally.

It comes as Klarna remains in pause mode regarding a highly anticipated U.S. IPO that was at one stage set to value the SoftBank-backed company at over $15 billion.

Klarna put its IPO plans on hold last month due to market turbulence caused by President Donald Trump’s sweeping tariff plans. Online ticketing platform StubHub also put its IPO plans on ice.

Prior to the IPO delay, Klarna had been on a marketing blitz touting itself as an artificial intelligence-powered fintech. The company partnered up with ChatGPT maker OpenAI in 2023. A year later, Klarna used OpenAI technology to create an AI customer service assistant.

Last week, Klarna CEO Sebastian Siemiatkowski said the company was able to shrink its headcount by about 40%, in part due to investments in AI.