With rising grocery prices, more Americans are turning to Buy Now, Pay Later (BNPL) programs to manage their expenses.

Groceries-related BNPL transactions increased by 40% in January and February 2023. This may indicate smart shopping in this tough economy, but BNPL programs aren't without risks.

BNPL programs allow customers to take out a loan to make a purchase and pay the full cost in installments later, typically over the course of six weeks without accruing interest.

For example, if you needed to purchase $400 worth of groceries, you would only need to pay $100 at the time of the purchase and would then pay the rest in $100 installments.

Whether you're shopping online or at major grocery retailers, such as Costco or Sam's Club, apps like Klarna, Afterpay, PayPal, and Zip enable you to easily use BNPL programs.

BNPL plans help you stretch your money but also make it easier to overspend. With some plans charging interest or fees, including late payment fees, you may pay more over time.

According to Consumer Financial Protection Bureau data, nearly one-quarter of Americans who have used BNPL plans immediately regretted it, as they couldn't make the full payments.