‘Buy Now, Pay Later’ (BNPL) is becoming more popular as costs are rising.
A BNPL usage study in November 2022 found that consumers aged between 18 and 24 have been the most reliant on BNPL services, such as Klarna, Clearpay and PayPal Pay in 3 instalments. Not only are these services available when online shopping, but they have recently expanded to instore shopping and even food takeaway services.
BNPL is a controversial topic. While there are definitely some benefits giving consumers the ability to break payments into smaller amounts over time, there are also some important risks – such as overspending and losing track of spending – to consider before getting involved:
Advantages
- Usually no interest charges
- Use your purchase immediately
Risks
- Damage to your credit score
- High interest and late free charges if you don’t pay what you owe on time
- Temptation (and ability) to overspend
- BNPL is an unregulated industry
If you are going to use a BNPL service, make sure you:
- Understand what you’re agreeing to
- Can afford what you’re paying for
- Know how and when you’re going to pay it back
- Keep track of what you owe by setting reminders
- Stay on top of your repayments.
Download the free BNPL Guide on Blackbullion to read more on how BNPL providers make money, the above advantages and risks in detail, and what to think before using these services.
If you’re concerned about any debts you may have, get in touch with The Student Hub – available 24 hours a day, 365 days a year. You can also visit the Students’ Union Advice Centre from Monday to Friday, 9.00 to 17.00, to seek support from a trained and experienced debt advisor who can liaise with creditors on behalf of students and offer one-to-one budgeting advice.
For information on financial support funds, food offers and much more at the University and Students’ Union, please see the Cost of Living SharePoint site.