‘Very depressing': Retiree turned to credit cards for groceries and racked up $10,000 in debt — and she’s not alone

As grocery prices surge, some Americans are going into debt over it, relying on credit cards and Buy Now Pay Later (BNPL) options to pay for their food.

Laurie Lumbra, a 72-year-old retired teacher from Rotterdam, New York, lives on about $1,400 a month. A few years ago, she started paying for groceries with her credit cards, ultimately racking up $10,000 worth of debt.

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"It gets very depressing. You feel like you're just such a failure," she told Marketplace.

To pay off her debt, she ended up selling her car — and then cutting up her credit cards to avoid going into debt again. She now rides a bike for transportation and uses food banks.

Her story may sound extreme, but a new report from Urban Institute indicates that Lumbra is far from alone. Here's what's happening — and how to avoid going into debt over your grocery bill.

You're not imagining higher prices. The Urban Institute's newly released 2025 Well-Being and Basic Needs Survey points to a cumulative increase of 32% in the cost of groceries over the past five years.

And prices aren't going to drop any time soon. The Food Price Outlook (FPO) from the U.S. Department of Agriculture's Economic Research Service (ERS) expects that food-at-home prices will increase 2.7% this year and 2.9% in 2027.

Some categories are expected to see much higher increases: beef and veal (10.7%), fresh vegetables (6.8%) and sugar and sweets (7.2%), according to the ERS.

Supply chain disruptions, labor shortages, global conflict and disease outbreaks have all played a role in rising food prices. The Russian invasion of Ukraine drove up wheat prices, while the bird flu led to a spike in the price of eggs. Tariffs on trade partners have also bumped up prices in some imported food categories (such as tomatoes from Mexico).

Extreme weather is also playing a role. For example, many ranchers have reduced their herds as drought conditions and water shortages make it harder to maintain livestock, in turn driving up the cost of beef.

Following five years of elevated inflation, the Iran war created fuel shortages that have driven up prices, impacting shipping and production costs throughout the supply chain. The war is costing the average American household more than $1,200, Mark Zandi, Moody's Analytics chief economist, told NBC News.

As families face "persistently higher prices when they go to the grocery store," some are turning to credit and other strategies to "bridge the gap," according to the Urban Institute survey.

Some people are reducing how much they spend on groceries, but others are relying on credit cards or BNPL, using cash from payday loans or drawing down savings.

Nearly two-thirds (63.2%) of Americans aged 18 to 64 paid for groceries with a credit card in 2025. But nearly one in 10 (8.7%) weren't always able to make the minimum payment, meaning they're racking up late fees and penalties. Another 19.6% paid the minimum balance, but not the full amount owed, which means interest will add up over time.

Nearly one in 10 used BNPL to pay for groceries and, of those, about a third missed at least one payment in 2025. Another 5.2% used cash from a payday loan, while 19.6% dipped into their savings to buy groceries.

"Although access to credit and savings can provide a lifeline for families struggling to meet basic needs, relying too much on these strategies may lead to financial instability if they have a hard time keeping up with debt or do not recover financially after drawing down savings," read the report.

While the Urban Institute surveyed working-age adults, retirees on a fixed income are at particular risk of becoming food insecure.

The first step to getting back on financial track is to stop racking up even more debt.

Creating a budget can help you shop smarter. Say, for example, you budget $250 a week for groceries. If you find you're regularly spending more than that (and using a credit card or dipping into your savings to bridge the gap), consider ways to reduce your bill back to $250.

For example, you could switch from brand-name products to cheaper generic brands. You could shop sales and use coupons. Apps can help, too: Flashfood can help you track down discounted groceries, while Too Good To Go allows you to buy surplus food from restaurants, bakeries and stores.

Your strategy could also mean adjusting your diet a bit. Consider how much you could save if you cut out that ribeye steak for lentils or chickpeas, or even chicken, instead. You can also maximize your leftovers rather than tossing them while they're still good to eat.

If you're regularly going over budget — say, on impulse purchases at the grocery store — consider shopping with cash and leaving your credit card at home.

Those still struggling may want to see if they're eligible for the Supplemental Nutrition Assistance Program (SNAP).

From there, you'll want to start paying down debt or replenishing the savings you dipped into.

You might consider using the avalanche method (pay the balance with the highest interest rate first, while paying the minimum on all other debts) or the snowball method (pay the smallest balance first and 'snowball' your way up).

You may also be able to move your credit card balance to a 0% APR balance transfer card, but make sure you don't continue to accumulate debt. That 0% APR won't last forever.

You probably don't want to get to a point where you have to do something drastic — like sell your car and cut up all your credit cards — to pay off debt from buying groceries and other essentials. But continuing to rely on a credit card or BNPL isn't an ideal long-term solution either.

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This article originally appeared on Moneywise.com under the title: 'Very depressing': Retiree turned to credit cards for groceries and racked up $10,000 in debt — and she's not alone

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.