More than half of UK shoppers used buy now, pay later in 2025 — and with the average purchase sitting at £114, it's clear BNPL has become a go-to way to spread the cost of everyday spending.
But is it always the bargain it seems? Add interest or late fees into the mix, and the true cost can creep up quickly. Consumer bodies and regulators have expressed concern that many may end up borrowing more than they can afford, leading to financial difficulties.
BNPL can be a useful way to spread the cost of a purchase — but it isn't always the right choice. Like any form of credit, it comes with both benefits and risks. Read on to find out everything you need to know before you use it.
Buy now, pay later is a type of short-term credit that lets you get something now and pay for it later — either in one lump sum or in smaller instalments. Popular BNPL providers include Klarna, Clearpay, and PayPal. You'll often see them offered at the checkout when shopping online.
When you choose a BNPL option at checkout, the provider pays the retailer on your behalf. You then repay the provider directly, usually over a few weeks or months. Most BNPL plans are interest-free, as long as you pay on time. If you miss a payment, you may face fees or interest charges.
Yes, BNPL can affect your credit score. Some BNPL providers run a hard credit check when you apply, which leaves a mark on your credit report.
If you miss payments, some providers will report this to credit reference agencies like Equifax, Experian or TransUnion, which could lower your credit score.
Most major providers now share data with credit reference agencies, so it's best to treat BNPL like any other form of credit and always pay on time.
BNPL providers make most of their money from the retailers, not from you. They charge retailers a fee for each transaction, because BNPL tends to increase sales. Providers can also earn money through late payment fees and interest charges when customers don't repay on time.
If BNPL doesn't feel right for you, there are other ways to spread the cost of a purchase:
BNPL can be worth it — but only if you're confident you can repay on time and you're not using it to buy things you can't truly afford. It works best as a budgeting tool, not a way to stretch your finances beyond their limit. If you're already managing debt or struggling with repayments, it's worth exploring other options first.
Think carefully before using any form of credit. If you're unsure what's right for you, speaking to a free debt adviser — such as StepChange or Citizens Advice — is always a good idea.
Disclaimer: We make every effort to ensure content is correct when published. Information on this website doesn't constitute financial advice, and we aren't responsible for the content of any external sites.
Zubin is a personal finance writer with an extensive background in the finance sector, working across management and operational roles. He applies his experience in customer communication to his writing, with the aim of simplifying content to help people better understand their finances.
