Alarm as buy now, pay later shoppers soar to record 15 million

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Research by credit reference agency Equifax shows 28 percent of UK shoppers use BNPL regularly, making at least one repayment in October ‑ up from 23 percent last December. Figures suggest about 14.8 million people are using the service now, 2.6 million more than at the start of the year.

BNPL allows customers to spread the cost of retail buys over weeks or months, often with no additional interest.

But experts warned rising prices and interest rates could hit finances.

Jayadeep Nair, of Equifax, said: “As useful as BNPL can be, it’s important shoppers don’t see it as a way to overstretch themselves in the coming weeks.

“Unless wages keep pace, most borrowers will see their finances squeezed over the coming months. The message to shoppers is, ‘Are you sure you can make the repayments on time? And could you have afforded this purchase without BNPL?’.”

There are also signs Christmas worries are fuelling BNPL use. One in five felt pressure to buy presents for family and friends and more than a quarter would struggle without it.

Twenty-seven percent of young people also say it will soften the financial blow of Christmas.

The growth of BNPL has also sparked scrutiny from the Treasury and the Financial Conduct Authority.

Comment by Jasmine Birtles

If you’re on top of your money buy now, pay later can be a clever way to spread the cost of large purchases over a few months with no interest to pay.

The fact that retailers promote BNPL shows that they are also benefiting from it, even though they have to pay the companies behind it.

Clearly customers who would normally buy just one item are buying several because it doesn’t feel like they’re spending.

But if you don’t clear your debt before the interest-free period is up, some BNPL companies will ask for a settlement fee or they’ll add a lump sum of interest to the debt. You might also be charged late-payment fees. In some cases, your credit score could be hit.

The other big problem is it is still unregulated, which means customers may not be treated fairly and get deals that they can’t afford.

If you would not pay for an item in full now, stay away from BNPL.

To spread the cost you could try an interest-free credit card, which also has purchase insurance.

Jasmine Birtles is a financial expert

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