Table of Contents
- The Rise of BNPL Debt: What’s Happening Right Now
- How to Avoid the BNPL Debt Trap
- Regulatory Changes in the UK
- Take Control of Your BNPL Debt Today
Buy Now Pay Later (BNPL) has become one of the fastest-growing ways to shop, especially online. With promises of interest-free instalments and quick approvals, it can seem like a convenient tool for managing money. But beneath the surface, BNPL can carry risks, particularly when borrowing becomes frequent, late fees pile up, and multiple loans overlap.
This blog looks at the latest trends in BNPL debt, the hidden traps to watch out for, and the practical steps you can take to avoid them.
The Rise of BNPL Debt: What’s Happening Right Now
Buy Now Pay Later has grown rapidly over the last few years, but with that growth comes clear warning signs. More shoppers are juggling multiple BNPL loans, missing payments, and facing fees that make debts harder to clear. At the same time, the ease of spreading payments is fuelling overspending and impulse buying.
Let’s look at the key trends shaping BNPL debt today.
Increased Use and Overspending
BNPL use has surged in the UK, especially among younger shoppers. Many people now have more than one BNPL loan running at the same time, which makes repayments harder to track. What starts as an easy way to spread the cost can quickly turn into overspending and financial stress.
Research shows that many consumers struggle to repay their BNPL commitments. When instalments overlap, debt levels can rise sharply, creating a cycle that feels difficult to escape.
Impulse Buying
BNPL has changed how people shop. By making purchases feel instantly affordable, BNPL services encourage impulse spending. This fuels a “buy now, think later” mindset, which often leads to unnecessary purchases.
YouTube commentary on BNPL highlights how this culture of instant gratification encourages consumers to buy more than they intended, particularly in fashion, beauty, and electronics.
High Late Fees
Although BNPL is marketed as interest-free, the real costs come when payments are missed. Late fees, penalty charges, and in some cases interest can quickly outweigh any savings from using instalments in the first place.
This is especially risky for people with multiple BNPL accounts across different providers. Even one late payment can snowball into further charges and, in some cases, collections activity.
Psychological Impact
BNPL providers design their services to reduce “payment friction”, making spending feel easier by delaying the reality of repayment. Psychologists note that this taps into natural neurological responses, making the debt feel less consequential in the moment.
The result? Consumers underestimate the true cost of their borrowing, which makes overspending more likely and debt traps harder to avoid.
How to Avoid the BNPL Debt Trap
BNPL doesn’t have to be harmful if it’s used carefully. The key is to stay in control of your borrowing and not let the ease of installments dictate your spending habits. Here are some practical steps:
Budget and Track Spending
Create a clear budget that tracks your income, regular expenses, and any BNPL repayments. This will show you exactly how much disposable income you have, helping you avoid accidental overspending.
Spend Within Your Means
Only use BNPL for purchases you could pay for in full right now if you had to. If you couldn’t comfortably clear the balance today, it may be better to wait until you can afford it.
Prioritise Essential Purchases
Reserve BNPL for essentials, like replacing a broken appliance, rather than non-essential or luxury items. Using it for impulse buys only increases the risk of falling into arrears.
Understand Terms and Conditions
Before committing, read the fine print. Some providers add hidden fees for longer repayment plans or increase charges if you miss even a single installment. Make sure you know exactly what you’re signing up to.
Set Reminders for Payments
Digital calendars, banking apps, or SMS reminders can help ensure you never miss a due date. Even one missed instalment can trigger late fees, so reminders are a simple but effective safeguard.
Avoid Multiple Loans
Stick to one BNPL plan at a time if possible. Juggling several across different providers makes it much harder to track repayments and increases the risk of missed payments.
Be Aware of Credit Impact
Some BNPL providers report to credit reference agencies. This means late payments can appear on your credit file, reducing your score and making it harder to borrow in the future.
Regulatory Changes in the UK
BNPL has grown so rapidly that regulation is now catching up. In the UK, the government has confirmed that new rules will be introduced in 2026 to bring BNPL in line with other forms of consumer credit.
New Regulations Coming
From 2026, BNPL providers will need to be authorised by the Financial Conduct Authority (FCA). This will give shoppers stronger protections and greater transparency.
Affordability Checks
For the first time, BNPL providers will be required to carry out affordability checks. This is designed to prevent consumers from taking on debt they cannot realistically repay.
Enhanced Consumer Rights
The new rules will also strengthen consumer rights by ensuring clearer information about terms, costs, and risks. Shoppers will benefit from protections similar to those offered on credit cards and loans.
Take Control of Your BNPL Debt Today
BNPL can make shopping feel easier, but missed payments and multiple loans can quickly turn convenience into stress. If you’re struggling with repayments to providers such as Klarna, Clearpay, or PayPal, PennyPlan can help you deal with arrears and explore the right debt solutions for your situation.
Our team offers free, confidential advice to help you deal with arrears, stop creditor pressure, and explore debt solutions such as Debt Management Plans (DMPs) and Individual Voluntary Arrangements (IVAs).
You don’t have to face BNPL debt alone, speak to us today and start building a clear plan to get back on track with your finances.
