Americans could experience a surge of credit card debt in November as Supplemental Nutrition Assistance Program (SNAP) benefits end for tens of millions of people.
The government shutdown has halted payments for the month of November, causing more than 40 million Americans to do without the food benefits upon which they rely. This could trigger many to turn to credit cards instead to cover their food necessities, creating an uptick of debt in the process, experts say.
Why It Matters
About 42 million Americans rely on SNAP to help pay for food every month. The payments help low-income people and families buy food at their local grocery stores with an EBT card that can be used on qualifying items.
Without the SNAP benefits covering food essentials, some will likely turn to credit card debt rather than allow their families to go hungry.
What To Know
If SNAP benefits are delayed, there could be a ripple effect for households already living on the edge of poverty.
“When EBT cards aren’t reloaded on time, people often turn to what little credit they have left, whether that’s maxing out a credit card, taking a quick cash loan with astronomical rate, or simply going without essentials altogether,” Kevin Thompson, CEO of 9i Capital Group and host of the 9innings podcast, told Newsweek.
Credit cards today carry some of the highest APRs in decades, averaging more than 20 percent.
“That kind of cost can turn a temporary delay into long-term debt, especially for households already living paycheck to paycheck,” Cynthia Chen, founder and CEO of Kikoff, a credit building platform, told Newsweek. “As balances grow, so does the risk of missed payments, lower credit scores, and shrinking access to affordable credit options.”
Some states have prepared contingency plans to extend food assistance or offer emergency relief, but many are likely to go hungry without the benefits loaded into EBT cards as usual.
On Friday, a federal judge blocked the Trump administration from cutting off SNAP benefits as a result of the government shutdown. The order stipulates that officials will have to tap into an emergency fund.
However, at the moment, the $5.25 billion the government has would not fully cover November benefits. For the entire month, the Trump administration will need more than $9 billion collectively.
What People Are Saying
Ofek Lavian, CEO of San Francisco-based Forage, which helps grocers serve the 42 million Americans who rely on EBT to feed their families, told Newsweek: “Delays in food assistance will push low-income families toward credit card debt and other predatory options, as they face the impossible choice between feeding their families in November or suffering long-term financial consequences.”
Thompson also told Newsweek: “We may not see traditional ‘bread lines’ like those during the Great Depression, but we’re already witnessing the modern equivalent — cars lined up at drive-thru food banks, pantries, and community centers just so families can eat. It’s heartbreaking, but also a reminder of how fragile many households’ financial situations truly are.”
Chen also told Newsweek: "When essential programs like SNAP get delayed, the consequences are immediate and severe. For millions of Americans, SNAP is not a supplement. It is a lifeline that keeps food on the table. When that lifeline stalls, people are forced to make difficult choices, skipping meals, delaying bills, or turning to credit cards and short-term loans to cover basic needs.”
Alex Beene, financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “Often forgotten in the discussion over the gap in funding SNAP is the domino effect it can have on recipients. Support from non-profits to feed one's family can only go so far, and undoubtedly, many will lean on credit cards and other forms of debt to cover expenses. This creates an even bigger financial hole for that individual and their family to climb out of once the shutdown ends and benefits are restored.”
What Happens Next
Long term, the halting of SNAP benefits could leave a historical mark, Thompson said. "People remember moments of struggle more than moments of ease. And when basic needs aren’t met, it reshapes trust and forges a new direction in the country itself.”
