![\"Affordability](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2026\/08\/108332026-17835147151783514712-47034423380-1080pnbcnews.jpg\")
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Affordability<\/a> is the “defining challenge” when it comes to economic mobility, according to a new report<\/a> by the McKinsey Institute for Economic Mobility and the W.K. Kellogg Foundation.<\/p>\n The survey of 30,000 Americans across income levels found that 90% of those polled cited groceries and food prices<\/a> as a top cost concern, even over other key expenses, such as housing<\/a> and healthcare<\/a>.<\/p>\n “We face a common challenge, and that is the rising cost of living,” said John-Paul Julien, a partner at McKinsey & Company and cofounder of the McKinsey Institute for Economic Mobility.<\/strong> “Although people are experiencing the economy differently, there is this shared feeling that rising costs are making it difficult to get ahead.”<\/p>\n Read more CNBC personal finance coverage<\/p>\n Consumer prices\u00a0pulled back in June<\/a>, but food costs edged higher once again, bringing the year-over-year gain to 3%, according to the latest\u00a0consumer price index<\/a>.<\/p>\n Food at home, a measure of price changes at the grocery store, also increased from a year earlier.<\/p>\n The Bureau of Labor Statistics is set to release the next CPI reading, with July data, on Aug. 12.<\/p>\n Some Americans take on debt to buy food <\/p>\n A separate Urban Institute analysis released in mid-July found that many families used credit and savings to pay for groceries<\/a> in 2025, and many showed signs of strain. <\/p>\n About 35% of adults paid for groceries with a credit card and paid their bills in full at the end of the month. Another 20% used a credit card and paid less than the full balance but still made the minimum monthly payment, according to the Washington-based think tank, while 8.7% did not always make the minimum payment. <\/p>\n The report is based on data from the Urban Institute’s December 2025 Well-Being and Basic Needs survey, which polled more than 10,000 adults.<\/p>\n Cardholders who pay their bill in full every month can maximize rewards while avoiding interest charges. Borrowers with revolving balances pay annual interest rates of more than 20%, on average, on their debt.<\/p>\n “There’s no doubt that there’s pressure in terms of affordability in this country,” said Marshall Lux, a visiting\u00a0fellow\u00a0with the Psaros Center for Financial Markets and Policy at Georgetown\u00a0University’s McDonough School of Business. However, “like everything else, it’s complicated.”<\/p>\n With grocery purchases mixed in with other credit card spending, it’s difficult to pinpoint what’s causing some consumers to fall behind on their payments, he said: “It’s hard to draw a straight line.”<\/p>\n A more “perennial” problem is the increased use of buy now, pay later<\/a> for everyday expenses, Lux said. <\/p>\n Nearly 1 in 10 adults used buy now, pay later<\/a> to pay for groceries; and among those who relied on installment payments, about 35% missed a BNPL payment, according to the Urban Institute. Generally, missed BNPL payments incur late fees, deferred interest or other penalties, depending on the lender. \u00a0<\/p>\n A separate March survey from LendingTree of more than 2,000 adults found that 29% of buy now, pay later users said they’ve used these short-term loans to buy groceries \u2014 up from 14% two years ago.\u00a0<\/p>\n Customers check out at a supermarket on August 12, 2025 in New York City. <\/p>\n Liao Pan | China News Service | Getty Images<\/p>\n With food-at-home prices up about 25% over the past five years, “families experience this as a cumulative increase,” said Kassandra Martinchek, a public policy expert at the Urban Institute and co-author of the study.<\/p>\n As a result, households are under “sustained pressure,” she said \u2014 leading to larger debt burdens that are harder to pay down. “We know that access to credit is a crucial lifeline for families, but relying on credit can lead to future financial instability,” Martinchek said.<\/p>\n Although low- and moderate-income households experienced more repayment challenges compared with high-income households, even some adults with higher incomes struggled with repayments, the report also found. That “suggests this challenge is broad-based across a lot of consumers and families,” Martinchek said.<\/p>\n