With federal government SNAP payments on hold, impacted families may turn to credit cards or even loans to cover household grocery costs until plan payments resume.
Doing so would likely be a slippery slope, personal finance experts say.
“Using a credit card to cover your grocery purchases with the intention of paying them back at a later time, especially utilizing future SNAP benefits, may create a debt spiral when credit card interest rates exceed 20 percent annually,” Michael Baynes, co-founder and CEO at New York City-based Clarify Capital, told NTD.
Consumers should understand that SNAP payments are intended to provide supplemental support to help families afford their grocery budget. “Consequently, essentially borrowing money you never anticipated to repay with cash is a formula for long-term debt,” Baynes noted.
The same goes for borrowing from family members or friends. “At first, such loans appear to be a non-issue, but this type of borrowing will put pressure on those relationships,” Baynes added.
This is particularly the case since repayment will depend on an unpredictable factor, such as SNAP payments resuming. “While private loans and lines of credit may occasionally be available to individuals for emergency funding needs, they’re rarely designed for short-term emergency food expenses, and are typically associated with high fees,” Baynes noted. “For example, a $500 loan may ultimately cost you twice as much if you’re not cautious."
Be Smart About Food Spending Until SNAP Payments Resume
Instead of relying on loans and credit, SNAP beneficiaries should explore every available option.
“That includes hitting local food banks, churches, school districts, and non-profits, which are all sources to bridge the gap until SNAP benefits return,” Shavon Roman, personal finance expert at Heal Plan Invest, a financial planning consulting firm, told NTD.
SNAP households should also consider using ChatGPT as a recipe generator. “You can simply put in the ingredients you have and prompt ChatGPT to create meal plan ideas,” Roman said.
If you do require additional funds and the cash is necessary immediately, consider applying for funding through a community assistance program or a credit union that offers no-interest loans, Baynes advised. “In general, the objective is to resolve a short-term funding issue and avoid developing a long-term funding problem," he said.
SNAP consumers should also know that once SNAP benefits are reinstated, they might not get missed benefits repaid. “Even if you do, the funds will go on your EBT card and it won't be cash,” Ashley Morgan, attorney and owner at Ashley F. Morgan Law, PC, told NTD. “Consequently, you’ll need to know how you will pay off that new debt.”
Ultimately, SNAP recipients need to do whatever it takes to survive. “If you have to put food on a credit card to make sure you and your family are fed, do what you need to do,” Morgan said. “Just make sure you give some thought to how you might be able to pay off that debt later.”
The views and opinions expressed are those of the interviewees. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. NTD does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. NTD holds no liability for the accuracy or timeliness of the information provided.