Americans Are Financing Gas and Groceries With BNPL as Household Budgets Thin Out
Block revealed this week that Cash App users are now financing gas fill-ups through its Afterpay service.
The average customer used BNPL for gas purchases roughly 3.6 times between Feb. 4 and May 15. Block ran the pilot program ahead of its formal Afterpay-on-Cash-App launch.
That same pilot found customers used Afterpay roughly 2.2 times for grocery purchases over the same stretch.
44% of consumers remain highly concerned about their ability to afford gas, according to consumer analytics firm Numerator.
Numerator analyst Amanda Schoenbauer said consumers feel slightly worse about their finances than they did at the start of the year.
Nearly 1 in 3 Americans are using BNPL to cover groceries, per LendingTree data. Almost half of BNPL users missed at least one payment over the past year.
BNPL adoption hit new highs across all income groups in Q1 2026, per Consumer Edge transaction data cited by BTIG. Roughly 15% to 17% of households earning up to $150K used the services.
Among shoppers earning over $150K, adoption rose to just under 13%.
Providers Disagree on BNPL for Daily Essentials
Block's head of business, Owen Jennings, framed the shift as generational preference rather than pure distress.
"There's a mixed shift, especially for younger folks, away from traditional credit cards," Jennings told MarketWatch. He cited BNPL's simpler, non-revolving structure as the draw.
But not every BNPL provider is chasing this market.
Klarna told MarketWatch customers typically skip installment financing on low-value orders, using a pay-in-full debit product instead.
PayPal declined to provide spending data for its Pay In 4 product, and Affirm could not provide granular category data either.
Under the new Afterpay-Cash App terms, customers pay a flat 7.5% finance fee over a six-week repayment window.
Block's core user base skews younger, lower-income, and non-white, a demographic historically underserved by traditional bank lending, per MarketWatch.
Tax Refund Tailwinds Are Fading Into Q2
Retail analysts say BNPL's surge likely helped prop up spending in Q1 alongside higher-than-usual tax refunds, obscuring some underlying consumer fragility.
Walmart finance chief John David Rainey said "higher tax returns muted some of the pressure related to higher fuel prices." He warned consumers may feel more strain as refunds stop flowing in Q2.
With that buffer gone and gas prices still elevated, BNPL figures heading into summer may offer the clearest window into where household finances actually stand.
