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1 in 4 working-age Americans are going into credit card debt to buy groceries

Grocery prices are expected to stay elevated with no end in sight for those on a tight budget. ©Image Credit: Unsplash / Karsten Winegeart

Shoppers are feeling the pinch in their wallets, and nowhere is it more noticeable than at the grocery store checkout. A new study shows that more Americans are using their credit cards to pay for groceries as food costs soar.

Groceries are stretching people's budgets

In the past five years, food prices have increased by 32%, so it's no surprise that they are pushing the middle class to their limits. In some cases, they are going past their limits, with many missing credit card payments according to a new study.

The middle class is relying on their credit cards to put food on the table because they don't have disposable cash available. According to the Urban Institute's study, it's also pushing one in four working-age Americans into credit card debt.

"Groceries are one of the largest household budget items for families. Over the past five years, food costs have increased substantially," said the report.

"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."

Credit card minimum payments are being missed

Another alarming statistic in the study is that more people are failing to make the minimum payment on their credit cards.

"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," said the report.

No end in sight to the high grocery prices

If you are hoping to see a drop in grocery store prices, you're not going to be happy. The Conference Board's chief economist, Dana M. Peterson, predicts that prices will hold steady and remain elevated for the foreseeable future.

Peterson also believes that the Federal Reserve's 2% inflation rate goal won't be reached until at least 2028.

Stretching your budget further

If all of this sounds very familiar to you, the best plan of action is to look for ways to stretch your grocery budget fuFrther with tips like meal planning, finding inexpensive recipes, and only buying what you need at the grocery store.

Source: Fox Business

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