Poster #87 - Household Reliance on Debt/Credit to Afford Groceries and How Public Supports and Private Resources Interconnect

• In Event: Saturday Poster Luncheon

Abstract

Increases in the cost of essential goods, a pared-down social safety net, and increased borrowing costs left many families struggling to meet their financial needs in 2025. In such circumstances, families may turn to personal savings and credit to make ends meet. Prior research has documented how families respond to cutbacks in safety net program generosity with private supports—including charitable food resources and private economic resources, including credit. Although access to credit and savings can provide a lifeline and help families smooth consumption, overly relying on these resources may lead to short- and long-term financial instability if families have a hard time keeping up with debt or do not recover from using savings.

This paper draws on data from the Urban Institute’s Well-Being and Basic Needs Survey, a nationally representative internet-based survey of adults ages 18+ that is the first national survey to ask questions about the use of debt and credit to afford groceries. We use descriptive quantitative analyses to explore how many families use credit (including credit cards, Buy Now, Pay Later (BNPL) options, and payday loans) and take on debt when paying for groceries, how this varies over time, how this varies across income, race/ethnicity, food security status, and age. We find that credit and debt are core strategies for many adults in affording groceries, with increases in working-age adults (18-64) taking on credit card debt for grocery purchases between 2023 and 2025. While lower-income and food-insecure households are more likely to draw down non-routine savings, use cash from payday loans, and take on credit (BNPL and credit cards) that they are unable to repay; these financial coping strategies are broad-based—meaning they effect families across income, food security status, age, and other characteristics. We also explore the interplay between public safety nets, private food supports, and private household financial coping strategies—drawing on descriptive analyses to understand variation in coping strategies and hardship between SNAP participants, charitable food participants, and other low-income non-participants and how families knit together these resources to meet their food needs (preliminary analysis, not yet cleared in disclosure).

These findings show that many families used savings, credit from credit cards, BNPL, or payday loans to afford groceries, with increases in repayment challenges over time—signaling growing hardship among families. Understanding the complex interplay between public and private safety nets is integral to understanding the implications of changes in public safety net policy (in terms of benefit generosity and eligibility) on households – a key policy priority for states. The implications of these findings suggest that state-level changes to safety net policy could consider complementary efforts to deepen consumer protection legislation and enforcement, as consumers increasingly rely on private credit to meet their day-to-day needs and experience repayment challenges.

Author

• Kassandra Martinchek, George Washington University
  Presenting Author