Congress will soon consider another reauthorization of the Farm Bill, the legislation that sets policies and procedures for the largest and most effective program the nation has for fighting hunger: the Supplemental Nutrition Assistance Program (SNAP).

The bill markup comes at a time when the high cost of food, expiration of pandemic-era supports, and increased borrowing costs have left many families struggling to meet their basic needs. This is especially true for families with low incomes, who already spend almost a third of their household budgets on food.

Ideally, families’ incomes should be high enough to pay for groceries. But this is simply not possible for all families. In a new analysis, we found that in 2023 many families turned to credit card debt, payday loans, savings, and Buy Now, Pay Later (BNPL) options to put food on their tables. Strengthening safety net programs like SNAP could help prevent this trend.

To pay for groceries, families are turning to options that could hurt their financial stability

In our analysis of December 2023 survey data from the nationally representative Well-Being and Basic Needs Survey, we found that in 2023 about 6 in 10 adults (60.5 percent) reported using credit cards to buy groceries in 2023. This included 20 percent of adults who paid for groceries with a credit card and paid less than the full balance while always making the minimum required payment. It included another 7.1 percent paid for groceries with a credit card and did not make the minimum payment.

Although credit can give families a financial cushion, carrying a revolving credit card balance can be an early indicator of financial distress and can undermine families’ ability to meet their basic needs in the future.

Adults who do not pay their full credit card balance incur interest on the balance they carry over—which has become more expensive for consumers since average credit card interest rates rose to a record high of 22.8 percent in 2023. And consumers incur even greater costs if they carry a credit card balance without making the minimum payment because of late fees and penalty interest rates.

Ultimately, the costs of compounding debt can make that debt more difficult to pay down, resulting in larger debt burdens that consumers could carry for a longer period.

Households experiencing food insecurity may have access to fewer resources and may need to rely on more expensive financial coping strategies to meet their day-to-day needs.

In 2023, adults experiencing very low food security—the most severe form of food hardship—were more likely than adults reporting less severe food hardship to rely on payday loans and savings and to have trouble repaying different types of debt. Among adults with very low food security,

  • more than half (51.3 percent) drew on savings to pay for food;
  • nearly half paid for groceries with a credit card and either paid less than the full credit card balance (21.5 percent) or did not make the minimum required payment (24.7 percent);
  • half of those who paid for groceries with a BNPL option reported missing a payment (5.8 percent); and
  • 1 in 10 used cash from payday loans to pay for groceries. Although payday loans can provide loan access to consumers with poor credit who cannot access affordable mainstream options, evidence suggests (PDF) that continued and repeated use can undermine families’ financial stability and increase debt burdens to unsustainable levels.

Read the full article about debt for groceries by Kassandra Martinchek and Dulce Gonzalez at Urban Institute.