Why I fired my Buy Now Pay Later Account
It’s an easy trap to fall into, you see something you want, or you’re looking for that expensive gift for your loved one and deep down you know you just don’t have the funds. To avoid the pain you consider a Buy Now Pay Later Scheme (BNPL)
A lot of people would just use a credit cards for those larger and unnecessary expenses.
However in more recent years people are turning ever more to the likes of Buy Now Pay Later schemes.
2025, will be the year best known for a massive up-take in people using Buy Now Payer Later schemes.
The Providers
Buy Now Pay Later schemes are one of the easiest borrowing experiences a consumer will ever have. As already mentioned you see a product, you can’t afford it so you spread the cost of 4 or 6 payments.
Providers most known for this include:
- ClearPay
- Klarna
- PayPal
To name just a few. According to UK Finance, the number of UK adults that are using BNPL services increased by 25% in 2024, and that figure is only going to increase in 2025.
Until the end of 2023, BNPL services were more commonly used by females. However over the past two years we have seen the gap between male and female usage get less with males now making up 22% of the usage and females at 28%.
Despite the number of users going up, the actual frequency of such schemes is remaining steady, which could be interpreted as a good thing. However, no matter how it is it painted, it is a debt.
The perfect product
On the surface BNPL service seems like the perfect product, after all surely its no different than paying back your mate down the pub who you borrowed £20 off.
Not quite.
Whilst on the surface you’ve satisfied the craving, you’ve got the product, avoided the pain of seeing a chunky bit of cash going out of your account and/or you have a gift for a loved one.
You are now, in debt to the tune of the full value of the product less the initial payment you made.
Over next for to six weeks you will be paying back the money you have borrowed.
So rather than just seeing one big lump sum going out of your account, you now have to ensure there is money in that account to cover the upcoming costs.
Missing payments can be costly with some late fees totalling as high as £25 or 25% of the order value.
Some BNPL schemes will even share the missed payment with Experian and TransUnion, impacting your credit score.
The affordability trap
BNPL schemes can also have an impact on affordability, in a recent study commissioned with the Association of Mortgage Intermediaries (AMI), a trade body, 67% of brokers said BNPL had either played a part or was the root cause of a mortgage application from a high street lender being declined.
Regularly using BNPL schemes could be a signal to a lender that you are in financial difficulty and are unable to manage your finances correctly.
Using BNPL doesn’t mean you will be rejected outright, providing you use it occasionally, sensibly and make your payments on time.
Just be very mindful when using these kinds of products, especially around the frequency.
Incoming Regulation
The significant growth of BNPL services has forced the regulators to act.
In 2026, the FCA will bring BNPL providers under full regulation in the UK. The proposed date for this regulation is the 15th July 2026.
The goal is to protect consumers by mandating affordability checks, the provision of clear product information, provide support for those who are suffering financial difficulty and access to the Financial Ombudsman Service (FOS).
For some, the incoming regulation will be seen as an end to the current unregulated wild west market and will align BNPL services with other forms of consumer credit.
My personal experience
As a digital marketing executive within the financial services sector. I thought using a BNPL scheme enabled me to have my cake and eat it.
However this week, whilst diving into my CeMAP course, studying The PRA & FCA Responsibilities and approach to regulation. I started to consider my own economy, the economy of Robert Haylor Ltd.
So come Boxing Day whilst everyone else will be shopping online or visiting the Boxing Day sales I’ll be logging on and closing my BNPL account for good.
An action that I should have taken long ago. The view, this will help clean up my own bank statements and credit score prior to applying for a mortgage in 2026.
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