Credit Card Reliance Skyrockets as 46% of Families Use Plastic to Buy Essentials

Argentines Increasingly Rely on Credit Cards to Afford Basic Goods Amidst Economic Strain

Buenos Aires, Argentina – nearly half of Argentines are now using credit cards to purchase groceries, signaling a growing trend of households relying on debt to cover essential expenses as purchasing power continues to decline.A recent study by the Center for Regional and Applied Studies (centra) at the University of Buenos aires (UBA) Faculty of Economic Sciences revealed a important shift in payment methods between December 2023 and May 2025.

Credit card usage for food purchases jumped from 39% to 46% during this period, while debit card use fell from 34% to 27%. Cash transactions also decreased, dropping from 20% to 16%. This shift underscores the increasing reliance on credit to maintain basic consumption levels in a challenging economic climate.

The trend suggests a growing number of households are turning to indebtedness to afford necessities like food, hygiene products, and essential items, effectively masking the real loss of purchasing power.

Economic Contraction Impacts Sales

The rise in credit card use coincides with a broader contraction in the Argentine economy. wholesale supermarket sales were down approximately 5% year-over-year in may 2025, despite a slight monthly increase of less than 1%. retail supermarket sales saw a 6.1% year-over-year increase, but experienced a 1.2% monthly decline.

Compared to the beginning of the current governance, wholesale sales are roughly 34% lower, while supermarket sales remain around 28% below previous levels. After 29 months, sales in both sectors have yet to recover to their initial values.

While supermarket sales have shown five consecutive months of growth, this hasn’t been enough to offset the overall retraction of about 10% since the beginning of the administration until January 2025. Supermarkets have experienced a 7% collapse,while wholesale sales have plummeted by 19%. Analysts suggest the disparity between wholesale and retail sales may indicate supermarkets are depleting existing stock without replenishing it through wholesale purchases.

Debt and Delinquency on the Rise

The data paints a concerning picture of mass consumption in Argentina. Despite recent modest gains in supermarket sales, demand remains below pre-December 2023 levels.The continued decline in wholesale sales, coupled with the increasing use of credit for basic goods, suggests consumption is being partially sustained through debt in an environment of income loss and economic uncertainty.

This growing dependence on credit to meet basic needs means families are allocating future income to pay for past consumption, reducing their financial adaptability and increasing vulnerability to unforeseen expenses or price increases. The accumulation of debt for daily expenses poses a risk to household financial stability and could exacerbate social vulnerability, especially with high inflation and interest rates.

Adding to the concern, delinquency rates are also rising. According to the Central Bank, the non-performing loan ratio for the private sector reached 2.6% in May 2025, a 0.4 percentage point increase from April. This further underscores the financial strain facing Argentine households and the challenges ahead for the domestic market to achieve a stable and sustained recovery.

What are the potential long-term financial consequences for families increasingly reliant on credit cards for essential purchases?

The growing Trend of Credit Card Usage for Daily Expenses

A recent surge in the cost of living is driving a significant shift in household spending habits.New data reveals that 46% of families are now relying on credit cards to cover essential purchases – groceries, gas, utilities, and even healthcare. This represents a substantial increase from the 39% reported at the start of 2024, signaling a growing trend of credit card dependence. This isn’t simply about convenience; it’s a reflection of financial strain impacting households across the nation. Understanding the reasons behind this shift, and the potential consequences, is crucial for both consumers and financial advisors. We’ll explore the factors contributing to this rise, the risks involved, and strategies for managing credit card debt.

Understanding the Root Causes: Why the Increase?

Several interconnected factors are fueling this increased reliance on plastic.

Inflation: Persistent inflation, notably in essential goods and services, is the primary driver. Even with wage increases, many families find their paychecks don’t stretch as far as they used to.

Stagnant Wages: While inflation has soared, wage growth hasn’t kept pace for many workers, leaving a gap between income and expenses.

Reduced Savings: Years of economic uncertainty and unexpected expenses (like the COVID-19 pandemic) have depleted savings for a significant portion of the population. Emergency funds are dwindling, forcing families to turn to credit cards when faced with unexpected bills.

Buy Now, Pay Later (BNPL) Fatigue: While BNPL services initially offered an alternative to credit, many consumers are now juggling multiple BNPL plans and credit card debt, creating a complex financial situation.

Increased Cost of Borrowing: Rising interest rates on credit cards are making debt more expensive, but the immediate need to cover essentials often outweighs long-term cost considerations.

The Risks of Relying on Credit for Essentials

while using a credit card can provide short-term relief, prolonged reliance on credit for necessities carries significant risks:

Debt Accumulation: The most obvious risk is the rapid accumulation of credit card debt. High interest rates mean that even small balances can quickly balloon, making repayment increasingly arduous.

Credit Score Damage: High credit utilization (the amount of credit used compared to the total credit limit) negatively impacts your credit score. this can make it harder to qualify for loans, mortgages, and even rent an apartment.

Financial Stress: The constant worry about debt and the inability to meet financial obligations can lead to significant stress and anxiety.

Debt Cycle: Falling into a cycle of relying on credit cards to pay for essentials can be incredibly difficult to break, leading to long-term financial instability.

Potential for Fees: Late payment fees,over-limit fees,and annual fees can add to the overall cost of credit card debt.

Strategies for Managing Credit Card Reliance

Breaking free from credit card dependence requires a proactive and disciplined approach. Here are some actionable steps:

1. budgeting & Expense Tracking: Create a detailed budget to understand where your money is going. Track your expenses meticulously to identify areas where you can cut back. Utilize budgeting apps or spreadsheets.
2. Prioritize Essential Spending: Focus on covering essential expenses first – housing, food, utilities, transportation, and healthcare.
3. Debt Consolidation: Consider consolidating your credit card debt with a lower-interest loan or balance transfer credit card.This can simplify your payments and perhaps save you money on interest.
4. Negotiate with Creditors: Contact your credit card issuers and ask if they can lower your interest rate or waive fees.
5. Increase Income: Explore opportunities to increase your income, such as taking on a side hustle or asking for a raise at work.
6. Automate Payments: Set up automatic payments to ensure you never miss a due date and avoid late fees.
7. Seek Financial Counseling: if you’re struggling to manage your debt, consider seeking guidance from a non-profit credit counseling agency.

Real-World Example: The Johnson family

The Johnson family, a two-income household in Ohio, exemplifies this trend. Facing rising grocery and gas prices, they began using their credit card for approximately $500 worth of essential purchases each month. Initially, they planned to pay off the balance quickly, but unexpected car repairs forced them to carry a balance, accruing significant interest charges. They are now actively working with a credit counselor to develop a debt management plan. This case highlights the ease with which reliance on credit can escalate, even for financially stable families.

The Role of Financial Literacy

Improving financial literacy is crucial in preventing credit card dependence. Understanding concepts like compound interest,credit scores,and responsible credit card usage can empower consumers to make informed financial decisions. Schools, community organizations, and online resources can play a vital role in providing accessible financial education. Resources like the Consumer Financial Protection Bureau (CFPB) offer valuable tools and information.

Looking ahead: What to Expect

Experts predict that credit card reliance will likely