Latest / THE DAILY BRIEF / More Americans buying groceries on credit

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More Americans buying groceries on credit · THE DAILY BRIEF

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  Speaker 1: Welcome back to the takeout, Welcome to the conversation corner.
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  Speaker 1: More Americans, it's an interesting trend our resorting to buying
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  Speaker 1: groceries on credit. According to the Urban Institute, more than
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  Speaker 1: one in three adults use credit cards to buy their groceries,
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  Speaker 1: and nearly one in ten listen to this use buy now,
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  Speaker 1: pay later loan programs. Michelle Singletary recently covered this for
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  Speaker 1: The Washington Post, and she joins me, Now, so I
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  Speaker 1: know it's not unheard of, Michelle, for people to use
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  Speaker 1: credit cards to occasionally buy groceries. It can be for
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  Speaker 1: convenience or other things like that, but this looks like
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  Speaker 1: something a little bit more persistent and a behavioral reflection
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  Speaker 1: of high prices.
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  Speaker 3: Yeah, that's very true.
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  Speaker 2: In fact, quite a bit of people use credit cards
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  Speaker 2: to buy groceries. About almost thirty five percent of Americans
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  Speaker 2: use credit cards. Now, many of them do pay it
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  Speaker 2: off before the do date, but a growing number, almost
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  Speaker 2: twenty percent, can't.
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  Speaker 3: Pay it in full.
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  Speaker 2: They at least make the minimum payment, but they can't
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  Speaker 2: pay it in full, and almost I mean approaching ten percent.
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  Speaker 2: It's about eight point seven percent, But it's being pushed up.
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  Speaker 2: Aren't even making the minimum payment, and that's when it
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  Speaker 2: becomes a problem. People put it on their credit card,
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  Speaker 2: pay it off, get the drawing points whatever.
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  Speaker 3: Okay, but it's the people who.
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  Speaker 2: Are putting it on there because that's the only way
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  Speaker 2: they can afford to put food on their table. And
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  Speaker 2: the problem is if you only make the minimum payment
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  Speaker 2: or you don't make payment at all, now you're in debt, sometimes,
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  Speaker 2: you know, years and years in debt for food that
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  Speaker 2: you have long ago consumed.
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  Speaker 1: And what about buy now, pay later loans? That sounds
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  Speaker 1: like a dire behavioral adaptation.
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  Speaker 3: Yeah, you know, when.
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  Speaker 2: That program was introduced, buy now, pay later, the idea
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  Speaker 2: was that you would buy you know, maybe a dress
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  Speaker 2: or something or a couch. You had the money coming,
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  Speaker 2: and it was you know, you want to break the
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  Speaker 2: payments up.
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  Speaker 3: But when you use things like use that.
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  Speaker 2: For groceries, and it's ongoing thing because then you take
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  Speaker 2: out on one loan and then you take out another
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  Speaker 2: and it's compounded, that's when it really becomes a problem.
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  Speaker 2: And listen, quite a few people one to five percent
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  Speaker 2: are using payday loans to buy their groceries. So this
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  Speaker 2: says what the Urban Institute is concerned about it. What
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  Speaker 2: we all should be concerned about is that there is
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  Speaker 2: a great deal of Americans who are struggling so much
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  Speaker 2: that they have to buy their groceries on credit. And
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  Speaker 2: we understand paying your for your you know, Carver pay
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  Speaker 2: on credit, but grocery consumable goods like that, it just
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  Speaker 2: is a recipe for disaster for the future because if
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  Speaker 2: your money is obligated to these credit payments, that means
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  Speaker 2: you can't save. That means if you lose your job
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  Speaker 2: now you don't have any income and you have this debt.
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  Speaker 2: That is why it's the problem when you look down
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  Speaker 2: the road, because it prevents them from doing things. And
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  Speaker 2: we know that in order for this a community to
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  Speaker 2: continue to grow, we need people to be free of
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  Speaker 2: debt and the the ability to buy things and pay
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  Speaker 2: them off and save to send their kids to college
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  Speaker 2: or for retirement. But if we've got a great number
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  Speaker 2: of Americans who can't even buy food without putting it
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  Speaker 2: on debt, that's to concern us all.
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  Speaker 1: So there were a lot of debates last year, Michelle,
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  Speaker 1: I know you will remember them about the so called
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  Speaker 1: Big Beautiful Bill. One of them was about supplemental nutritional
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  Speaker 1: assistance programs snap well we used to think of as
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  Speaker 1: food stamp benefits. Republicans said they were tightening up regulations
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  Speaker 1: to attack waste fraud and abuse. Critics said, no, no,
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  Speaker 1: that's going to have real world ramifications or people are
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  Speaker 1: going to lose benefits, and that's going to show up
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  Speaker 1: statistically later. Has it?
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  Speaker 3: It definitely has.
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  Speaker 2: We see millions of people, you know, and so they said, okay,
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  Speaker 2: all we're going to ask them is to, you know,
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  Speaker 2: make sure you put in this paperwork.
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  Speaker 3: Anybody who's worked with.
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  Speaker 2: Real people know, the more ONWUS you put on them,
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  Speaker 2: on all this heavy paperwork, they're going to fall off.
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  Speaker 2: And that exactly what happened. People are losing their benefits
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  Speaker 2: of millions of children are losing the the program that
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  Speaker 2: you know, they're being kicked off through their parents of course,
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  Speaker 2: and so it is having a real world impact on
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  Speaker 2: the ability of families to feed themselves.
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  Speaker 3: And it was designed that way. They wanted to get
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  Speaker 3: people off of those roles.
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  Speaker 2: But you know the thing about it is it was
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  Speaker 2: there to help people when they're having a tough time,
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  Speaker 2: and many people aren't on there for years and years
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  Speaker 2: and years. They had a job loss, or they got
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  Speaker 2: sick and they need some help.
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  Speaker 3: You know.
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  Speaker 2: I've worked with people who, you know, particularly doing the
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  Speaker 2: grave receession, lost their job and had to get snap
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  Speaker 2: benefits and as soon as they were able, they came
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  Speaker 2: off of that. Why put in you know, uh, you know,
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  Speaker 2: roles that make it more difficult for people to feed themselves.
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  Speaker 2: I mean, nobody wants to be on these benefits that
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  Speaker 2: they don't have to, so if they are applying, that
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  Speaker 2: means that they need the money. And when we do
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  Speaker 2: these kinds of things in a vacuum, they're not really
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  Speaker 2: th thinking about the end user, the parents and the.
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  Speaker 3: Children in particular.
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  Speaker 2: We don't want we should not have children in America
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  Speaker 2: going hungry, and that is one of the fallouts of
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  Speaker 2: that big bid, I would say, big awful bill that
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  Speaker 2: was passed last summer.
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  Speaker 1: And what advice quickly, Michelle, would you give to those
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  Speaker 1: who are thinking about whether they should or shouldn't use
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  Speaker 1: some of these things, either find out pay later programs
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  Speaker 1: or credit cards.
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  Speaker 3: You know, that's such a tough question. And I serve
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  Speaker 3: in my community.
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  Speaker 2: I run a program at my church, and so I
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  Speaker 2: always have a hard time answering that question because people
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  Speaker 2: do what they.
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  Speaker 3: Have to do.
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  Speaker 2: But if you can, please don't put that on credit.
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  Speaker 2: You know, use food banks. Hopefully you're part of a
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  Speaker 2: community where you can find resources, Like my church has
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  Speaker 2: a food bank where they give out grocies to people.
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  Speaker 2: Look around for programs in which you can utilize. And
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  Speaker 2: I'm going to say this to other people who are listening.
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  Speaker 2: If you know people in your spear, your influence, you
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  Speaker 2: or your church or your community, and you know they're struggling,
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  Speaker 2: help them with some groceries, just buy a grocery card
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  Speaker 2: and give it to them. I think to who much
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  Speaker 2: is given, much is required. So rather than put any
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  Speaker 2: onus on people who are struggling to say, hey, don't
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  Speaker 2: use that credit card, bad you, I want to appeal
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  Speaker 2: to people who are listening to reach out, you know,
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  Speaker 2: give more to the food banks, give more to nonprofits
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  Speaker 2: that are helping feed people who need the money to
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  Speaker 2: buy groceries for themselves.
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  Speaker 3: I think that's the advice I would give that give.
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  Speaker 2: More if you are in the position to do it,
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  Speaker 2: if you can afford it. I know my husband and
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  Speaker 2: I do that, and I would encourage other people to
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  Speaker 2: do that so that families don't have to put their
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  Speaker 2: groceries on their credit card.
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  Speaker 1: Sell Singletary. Thank you so much for your time. I
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  Speaker 1: appreciate it.
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  Speaker 3: You're welcome