Urban Institute Report Finds Rising Grocery Costs Drive Debt

A report from the Urban Institute reveals that increasing grocery prices are forcing a growing number of Americans to rely on credit cards, payday loans, and long-term savings to afford food. Based on a December 2025 survey of working-age adults, the data shows that 63% used credit cards for groceries last year, with 8.7% unable to make even the minimum payments—an increase from 7.1% in 2023.

Financial distress extends beyond credit cards, as nearly 10% of adults utilized buy now, pay later loans and approximately 5% turned to payday loans. Additionally, about 20% of working-age adults depleted long-term savings not intended for daily expenses to cover food costs. The research attributes these trends to food prices rising nearly 32% from pre-pandemic levels, compounded by recent inflation spikes linked to a U.S.-Iran war.

Broader economic indicators suggest a deepening crisis. Total U.S. household debt reached $18.77 trillion by the end of 2025, and individual bankruptcy filings rose by 12% over the previous year. Low- and moderate-income households remain the most susceptible to these repayment challenges.