(NewsNation) — In an effort to combat inflation and rising costs, more people are turning to buy now, pay later apps for essentials like groceries.
Although inflation has shown signs of slowing, grocery prices have remained high. Recent numbers show retail sales have dropped as consumers cut back and analysis indicates that even when people are spending more money, they’re getting less for it.
Buy now, pay later apps work as short-term loans, allowing customers to break a big purchase into monthly installments. Some people turn to them as an alternative to continuing to add to credit card debt and the industry took off during the pandemic. Apple is the latest player in the game, as it announced it will be starting to launch an Apple Pay Later option for purchases up to $1,000.
These apps may be attractive because, unlike credit cards, many of them don’t charge interest on the purchase. At least, not if it is paid off quickly. Some apps charge interest if consumers want to spread payments out for a longer period of time and late fees can accrue quickly if a payment is missed.
As with credit cards, experts warn that it can be easy to get into a cycle of overspending and end up in worse financial shape. But with Americans turning to increasingly creative ways to help manage the high cost of food, these apps may only become more popular.