Consumers who buy now and pay later are ‘relying on one debt to pay off another,’ charity says
- More than two-fifths of buy now, pay later (BNPL) shoppers have borrowed money to make repayments.
- Some people are “relying on one debt to pay off another debt.”
- Younger customers were the most inclined to borrow to pay off BNPL purchases.
According to Citizens Advice, more than two-fifths of buy now, pay later (BNPL) shoppers have borrowed money to make repayments.
With sorts of borrowing such as loans, overdrafts, and credit cards, some people are “relying on one debt to pay off another debt.”
Younger customers, according to Citizens Advice, were the most inclined to borrow to pay off BNPL purchases.
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According to the charity, 51% of persons aged 18-34 borrowed money to pay off BNPL debt, compared to 39% of those aged 35-54 and 24% of those aged over 55.
Citizens Advice increased its calls for affordability checks in the BNPL industry, which is still unregulated.
It went on to say that some clients “didn’t completely comprehend how the repayments would be set up,” which was “concerning.”
Millie Harris, a debt adviser at Citizens Advice East Devon, says, “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.
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“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 favor.
“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.
“Too often that means people don’t realize how serious it is; that it is credit and there are consequences if they don’t repay it.”