A new report from the McKinsey Institute for Economic Mobility and the W.K. Kellogg Foundation surveyed 30,000 Americans and identified affordability as the primary obstacle to economic mobility. The research found that food costs dominate household concerns across income levels, with 90% of respondents citing groceries as a leading expense worry. According to the latest consumer price index data, food prices rose 3% year-over-year, while food costs at grocery stores also increased compared to the prior year.
An Urban Institute analysis released in mid-July revealed that many households turned to credit and savings to manage grocery expenses. The data showed that 35% of adults used credit cards and paid their full balance monthly, while 20% carried revolving balances with payments averaging above 20% in annual interest rates. Another 8.7% of cardholders occasionally missed minimum payments. The analysis was based on a December 2025 survey of more than 10,000 adults examining financial well-being and basic needs.
Beyond traditional credit cards, households increasingly relied on buy now, pay later options for grocery purchases. Nearly 1 in 10 adults used installment payment services for food, with approximately 35% of those users missing payments and facing late fees or deferred interest charges. A separate survey found that 29% of buy now, pay later users had purchased groceries through these services, more than double the percentage from two years prior.
Experts noted that cumulative price increases compound household financial strain. Food-at-home prices have risen approximately 25% over the past five years, creating sustained pressure on family budgets and leading to larger debt loads. While lower- and moderate-income households reported more repayment difficulties, higher-income families also experienced challenges, suggesting the affordability issue affects consumers across the income spectrum. Analysts cautioned that reliance on credit, though serving as a financial lifeline, may create future instability for households struggling with rising living costs.
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