Millions of Americans are increasingly relying on credit cards to cover essential expenses like groceries, gasoline, and utility bills, leading to a significant rise in household debt. Total credit card debt in the U.S. climbed to $1.26 trillion by the end of the second quarter of 2026, an increase of $21 billion from the previous quarter and $54 billion from the prior year, according to the Federal Reserve Bank of New York.
While using credit for everyday purchases is not new, the issue becomes problematic when households cannot pay off their balances monthly. This can transform routine spending into debt that takes months or years to repay, often accumulating substantial interest. A 2026 survey commissioned by Accredited Debt Relief found that 66% of respondents had used a credit card for groceries in the past year, with 29% reporting they relied on credit or borrowing monthly to make ends meet.
When consumers use credit cards for necessities and only make minimum payments, it indicates a potential cash flow shortfall. If the principal on this debt grows, the interest accrued can eventually exceed the original cost of the items purchased. Credit cards are designed for convenience and short-term credit, offering benefits like rewards and purchase protection for those who pay balances in full. However, when they become a substitute for income, the financial implications can be severe.
For instance, a household charging $800 in groceries monthly and paying the balance in full avoids interest. But if only $600 can be repaid, the remaining $200 becomes revolving debt. This pattern, even before interest, can add $2,400 in debt over a year. Furthermore, if a cardholder carries a balance, they may lose the grace period, causing new purchases to accrue interest immediately.
Unlike borrowing for assets like a home, financing groceries or gas means the purchased goods are consumed long before the debt is repaid, offering no resale value to recoup the expense. The Accredited Debt Relief survey also indicated a broader financial challenge, with only 28% of respondents able to comfortably cover expenses while saving, and just 14% expecting to be debt-free within a year at their current repayment rate.
The rising delinquency rates on credit card balances further underscore this financial pressure. In the second quarter of 2026, 6.97% of credit card balances transitioned into serious delinquency, meaning payments were at least 90 days overdue. This marks an increase from previous periods, with the share of balances at least 90 days delinquent rising from 7.6% in the third quarter of 2022 to 12.8% in the first quarter of 2026.
Buy Now, Pay Later (BNPL) services add another layer to household debt. These services allow consumers to split purchases into installments, often without interest if paid on schedule. While potentially useful for managing payment timing, BNPL can become a trap when used to finance necessities that consumers cannot otherwise afford. The practice of 'payment stacking,' where multiple installment plans are used simultaneously for essentials, can become unmanageable.
A January 2025 study by the Consumer Financial Protection Bureau (CFPB) found that about 63% of BNPL borrowers had simultaneous loans at some point, with 32% using at least two different providers. The CFPB also noted that BNPL users tend to carry higher balances on other unsecured debts, such as credit cards and personal loans. Younger consumers, aged 18 to 24, were particularly exposed, with BNPL purchases making up 28% of their total unsecured consumer debt during months of use.
Although many BNPL plans are interest-free, missed payments can incur fees, and automatic withdrawals might lead to overdrafts if funds are insufficient. For households relying on credit for necessities, it is crucial to distinguish between temporary cash flow issues and persistent income-expense gaps. Analyzing monthly income against essential expenses, debt payments, and installment obligations is a critical first step.
Borrowers who can manage their living expenses without accumulating new debt are advised to pay more than the minimum on credit cards to reduce interest costs and shorten repayment timelines. For those struggling with minimum payments, seeking solutions like nonprofit credit counseling or debt management plans can be beneficial. Debt consolidation or settlement services may also offer relief, but they do not address underlying budget shortfalls if spending continues to outpace income.