Buy now, pay later: how to use it without getting into debt

BNPL can be a fee-free way to manage cashflow for an essential purchase but keep track of the payment schedule

Typically the cost is split into three or four instalments that you pay off over a few weeks or months, and if you keep up with your repayment plan, you won’t pay interest or charges, so it can be completely free to use.

BNPL is offered by a vast array of retailers, usually at the checkout of online stores. It is also available at some physical shops.

Three brands – Klarna, Clearpay and Paypal – dominate the UK market. Many BNPL providers have their own app, and sometimes these offer “exclusive” deals. Some retailers offer just one BNPL option, while others have two or more.

At least 11 million people in the UK use BNPL, but regulators and consumer bodies have voiced worries that some will end up borrowing money they cannot afford to pay back on time, thereby incurring charges, getting into debt and damaging their credit score.