The Growing Burden of Grocery Debt
A quarter of working-age adults now find themselves turning to credit cards just to afford groceries, reflecting the stress of surging food prices/).
Food prices have risen 32% over five years. According to the Urban Institute report released Monday, “Groceries are one of the largest household budget items for families. Over the past five years, food costs have increased substantially.”
The study found that 63.2% of working-age adults ages 18-64 used a credit card to buy groceries last year. “This means that families today face persistently higher prices when they go to the grocery store, and food affordability remains a key concern for many,” the report stated.
The persistent rise in food costs stems from ongoing supply chain disruptions, global trade tensions, and geopolitical shocks, according to economists. Dana M. Peterson of The Conference Board noted that these factors will keep prices elevated for years, with inflation not reaching the Federal Reserve’s 2% target until at least 2028. Meanwhile, the Personal Consumption Expenditures index shows a 3.8% year-over-year increase as of April, and monthly data rose 0.4% that month.
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When families cannot pay their grocery credit card bills, it points to deeper financial stress. The Urban Institute report states: “Between 2023 and 2025, the share of working-age adults who paid for groceries with a credit card and did not make the minimum payment increased, signaling worsening financial distress among families.”
The data backs that up.
Meanwhile, 8.9% of adults used “buy now, pay later” installment plans to buy food. Among this group, 34.8% missed or made late payments on their installment plans.
The report cautions that leaning on credit can backfire. “Although access to credit and savings can provide a lifeline for families struggling to meet basic needs, relying too much on these strategies may lead to financial instability if they have a hard time keeping up with debt or do not recover financially after drawing down savings.”
What This Means for Households
The growing share of missed payments among middle-income households – those earning two to four times the federal poverty line – signals that even families with moderate incomes are finding it harder to cover basic food costs without falling behind on debt.
The report also noted that 8.9% of adults used “buy now, pay later” plans for food, with over a third missing payments – a sign that alternative credit is also straining household budgets. These trends reflect a broader erosion of financial stability as food prices remain 32% higher than five years ago, driven by ongoing supply chain issues and global trade tensions that economists say will keep inflation elevated for years.
The Urban Institute’s findings underscore that while credit cards offer temporary relief, persistent high prices risk trapping more Americans in cycles of debt.
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