With Christmas fast approaching, here's what you need to know about the impact BNPL purchases could have on your finances:
WHAT ARE YOU SIGNING UP FOR?
The Buy Now Pay Later customer journey is designed to make spending as easy as possible. Of the 14 million people that used BNPL in the UK in the past year, 39% did so without realising, and 42% didn’t fully understand what they were signing up for.
Only 11% of online checkout pages explicitly warned shoppers they were taking out a credit agreement, and not one of the checkout pages on leading retailers’ websites warned people they could be referred to debt collectors for missed payments.
Companies that focus on the price of the instalment, rather than total price can nudge people to take on more debt than they can manage.
Last year, shoppers were charged a total of £39 million in late fees, and more than 1 in 4 people regretted using Buy Now Pay Later companies.
THE HIDDEN IMPACT OF BUY NOW PAY LATER
Payments that seem small initially can quickly rack up.
In the past year: