Don't get caught out by new Buy Now Pay Later rules
New affordability checks mean you could be blocked from using Buy Now Pay Later but here are ways to avoid it.
Key points
- Buy Now Pay Later (BNPL) has been officially regulated in the UK since July, requiring lenders to have regulator approval.
- New affordability checks on each BNPL transaction could block shoppers from using the service for the first time.
- Sara Williams, a former debt adviser, suggests slowing down purchases, avoiding unnecessary credit limits, cancelling subscriptions, and seeking help from debt charities.
Buy Now Pay Later (BNPL) services have been officially regulated in the UK since July, meaning lenders such as Klarna and Clearpay must now have regulator approval to operate. This gives shoppers more access to refunds and independent rulings on complaints.
However, new affordability checks on each BNPL transaction could result in some shoppers being blocked from using the service for the first time. The checks vary by purchase and are partly based on the amount borrowed.
Advice for blocked shoppers
With the expensive festive season approaching, Sara Williams, a former volunteer debt adviser at Citizens Advice who posts tips as Debt Camel, offered four suggestions for those whose accounts are closed or borrowing limits reduced. She advised slowing down purchases and asking whether items are essential or can be postponed.
She also recommended being more careful about what you buy to avoid needing a high credit limit, such as buying lots of clothes in different sizes. Cancelling subscriptions can help escape the trap of using BNPL to cover previous payments, and talking to debt charities can provide help and food bank vouchers if BNPL is used for essentials.
Slow down your purchases: is what you are buying essential or can you postpone it?
— Sara Williams
Where to find debt advice
For anyone struggling with repayments on any type of loan, the article says to seek help before things spiral. The government-backed MoneyHelper website offers a guide to finding free debt advice nearby and suggests writing down exactly what you owe to plan repayment.
MoneyHelper also provides tools to check benefit and grant entitlements and a bill prioritiser to show which payments to make first. The article warns readers to be sceptical of debt solutions seen on social media.
