Britishers in debt of more than $5.49 billion for ‘buy now, pay later’ services

Almost eight million British shoppers who utilised 'buy now, pay later' (BNPL) services had outstanding amounts of £538 ($740) on average, totaling £4.14 billion ($5.49 billion) in the UK.

According to Credit Karma research, over half (48%) of BNPL purchases are for non-essential things like gadgets, cosmetics, or vacations, and 31% of Brits plan to use the service more as the Christmas season approaches.

But BNPL debt could be impacting consumers' credit score and ability to get a mortgage. 

Customers may stagger payments for things like clothes, footwear, cosmetic items, and furniture with no interest or fees if they pay what they owe on time, according to a rising number of firms including Klarna, Clearpay, and Laybuy.

Hundreds of online stores, like Asos, H&M, Boohoo, and JD Sports, offer the option to buy now and pay in three monthly or six weekly instalments.

According to official figures, the usage of BNPL in the UK nearly doubled in 2020, reaching £2.7 billion in transactions.

According to a Financial Conduct Authority study, 5 million consumers utilised a BNPL product between the start of the epidemic and the end of last year. 

(With inputs from agencies)