Buy Now Pay Later (BNPL) services like Klarna, Clearpay, and Laybuy are changing how people shop.
They let you spread the cost of a purchase over several weeks or months, often without interest.
It sounds like a great deal. But is it really?
BNPL is booming in the UK. More than 17 million Brits have used it.
Younger shoppers, especially those in their 20s and 30s, are the biggest users.
It’s easy, convenient, and feels less painful than paying upfront.
But the big question is whether BNPL is a smart money move or a slippery slope into debt.
How BNPL Works
BNPL lets you buy something immediately and pay for it later.
The payments are usually split into three or four instalments. Some plans delay payment entirely for a month or more.
If you pay on time, there’s often no interest or fees. If you miss a payment, charges can add up fast.
Retailers love BNPL because it encourages people to spend more.
Customers who use it tend to buy more expensive items or add extra things to their basket.
It’s also why so many online stores now offer it at checkout.
Why people love BNPL:
- No upfront cost – You don’t need to hand over a big chunk of money all at once.
- No interest (if paid on time) – Unlike credit cards, many BNPL options don’t charge interest.
- Quick and easy – Signing up takes seconds, and payments are automatic.
- Great for budgeting – It helps spread costs over time, making expensive items more manageable.
The hidden risks
While BNPL can be useful, it’s not without risks. The biggest danger? Spending more than you can afford.
Because the cost is spread out, people often don’t feel the impact immediately.
Small payments seem harmless, but they add up.
It’s also a psychological enabler. It makes spending more than you can afford normal, which it really shouldn’t be.
Here are some more risks of BNPL:
Debt can creep up
Many users take on multiple BNPL agreements at once.
If you’re paying off several purchases at the same time, the total monthly payments can become overwhelming.
Research shows that one in three BNPL users struggle to keep up with repayments.
Credit scores can take a hit
Some BNPL providers report missed payments to credit agencies. This means failing to pay on time could hurt your credit score.
A bad score can make it harder to get loans, mortgages, or even a mobile phone contract in the future.
Late fees and interest
If you miss a payment, you could face late fees.
Some providers also charge interest on overdue amounts, making what seemed like an interest-free deal much more expensive.
No regulation – Yet
The UK government is planning to regulate BNPL services, but for now, they don’t have the same protections as credit cards or loans.
That means there’s less help available if something goes wrong.
Who should use BNPL?
BNPL can be a useful tool if you’re disciplined with your money.
It works best when:
- You have a steady income and can comfortably afford the repayments.
- You only use it for planned purchases, not impulse buys.
- You keep track of your BNPL agreements and avoid stacking too many at once.
- You always pay on time to avoid fees and credit damage.
When BNPL is a bad idea
If you’re struggling financially or find it hard to stick to a budget, BNPL can make things worse.
It’s not free money. If you already have debt, using BNPL could push you deeper into financial trouble.
Alternatives to BNPL
Before choosing BNPL, consider other options:
- Savings – If possible, wait and save up instead of buying now.
- 0% Credit cards – Some offer interest-free periods but come with more consumer protections.
- Overdrafts – While not ideal, they can be cheaper than BNPL if managed carefully.
- Traditional layaway – Some retailers let you pay in instalments before receiving the item, reducing debt risk.
The verdict: Smart tool or debt trap?
BNPL isn’t necessarily bad. Used wisely, it can help with budgeting and cash flow.
But it’s easy to misuse.
The key is control. If you’re disciplined, BNPL can be a handy tool. If not, it can lead to debt problems.
Before clicking ‘Pay Later,’ ask yourself: Do I really need this? Can I afford it without BNPL? Will I be able to make the payments?
If the answer to any of these is no, it might be best to step away.
Financial health is about making choices that work for you in the long run. BNPL can be part of that – but only if you use it responsibly.
