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Two fifths borrowed to pay off Buy Now Pay Later

8 Mehefin 2022

More than two in five Buy Now Pay Later (BNPL) customers borrowed money to make repayments, Citizens Advice has found. The types of borrowing included overdrafts, borrowing from friends and family, loans and payday loans. The most popular was credit cards (26%).

Younger shoppers were most likely to borrow to pay off BNPL purchases. The charity found 51% of 18-34 year olds borrowed money to pay off BNPL debt, compared to 39% of 35-54 year olds and 24% of over-55s.

These latest findings come as the BNPL market continues its meteoric growth. But the sector remains unregulated. 

Citizens Advice is calling for regulation to protect customers, including market-wide affordability checks and clearer information at checkouts. Worryingly, the charity found more than one in 10  Buy Now Pay Later customers didn’t fully understand how the repayments would be set up.

Millie Harris, a Debt Adviser at Citizens Advice East Devon, said:

“Most of the people I speak to who are using Buy Now Pay Later live off overdrafts and credit cards, so are using these for repayments. It’s just relying on one debt to pay off another debt. 

“It’s heartbreaking to see parents who can’t afford their children’s clothes or shoes, turning to Buy Now Pay Later, thinking it’s doing them a favour. In reality it’s just more debt and more creditors, on top of what they’re already facing.

“What scares me most is how easily people can slip into using Buy Now Pay Later. They come to rely on it much more quickly than other forms of credit. It’s just a few clicks at a checkout. Too often that means people don’t realise how serious it is; that it is credit and there are consequences if they don’t repay it.”

Dame Clare Moriarty, Chief Executive of Citizens Advice, said:

“Shoppers are piling borrowing on top of borrowing, and sinking into ever more desperate situations that can feel impossible to escape from. 

“The spiral of debt from Buy Now Pay Later to credit cards, loans and even payday lenders shows it’s not a risk-free alternative. Buy Now Pay Later is part of the credit industry and must urgently be regulated as such.”

Notes to editors

  1. Opinium carried out a nationally representative survey of 2,288 respondents in the UK who’ve used Buy Now Pay Later in the last 12 months, between 11 and 28 March 2022. Questions respondents were asked included:

    In the last 12 months, have you used any of the following ways to pay for your Buy Now Pay Later purchases? 52% used money from their current account, 26% used credit card, 23% used savings, 9% used bank overdraft, 7% borrowed from friends and family, 6% used a personal loan, 5% used a payday loan, 3% used a guarantor loan and 8% selected ‘other’. In total, once adjustments were made for people who clicked more than one option, 42% of respondents used borrowing (credit card, bank overdraft, borrowing from friends or family, personal loan, payday loan, guarantor loan). In the 18-34 age group, 51% of respondents used borrowing. This compared to  39% of 35-54 year olds and 24% of over-55.

    Thinking about the most recent time you used Buy Now Pay Later to purchase something, how much would you say you understood how payments will be set up (e.g. is it automatic, do I need to set them up)? 11% said they either didn’t really understand or didn’t understand at all.

  2. Citizens Advice includes the national charity; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.
  3. Citizens Advice is the statutory consumer advocate for energy and post. We provide supplier performance information to consumers and policy analysis to decision makers.
  4. The Citizens Advice Witness Service provides free, independent support for prosecution and defence witnesses in every criminal court in England and Wales.
  5. Citizens Advice offers Pension Wise services at 500 locations in England and Wales.
  6. Citizens Advice’s services are free, independent, confidential and impartial, and available to all regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  7. To get advice online or find your local Citizens Advice, visit citizensadvice.org.uk
  8. For consumer advice, call the Citizens Advice consumer service on 0808 223 1133 or 0808 223 1144 to talk in Welsh.
  9. We helped 2.6 million people face to face, by phone, email and webchat in 2017-18. For service statistics see our monthly publication Advice trends.
  10. Citizens Advice staff are supported by over 23,000 trained volunteers, working at over 2,500 locations in England and Wales.