Buy Now Pay Later – Is It Right For You?
Recent research from HSBC has revealed that an estimated 15 million adults in the UK are currently using buy now pay later (BNPL). And it’s now the second most used form of finance behind credit cards.
The study revealed that 43% of women as opposed to 21% of men are more likely to use BNPL. This doesn’t surprise me at all because of the sites you typically see Klarna/ Clearpay/ PayPal Credit available on. In additionBNPL was the most popular between 25-34 year olds with nearly half of those questioned saying they’d used it in the past year.
And clothing is found to be the most frequent purchase type for users of BNPL services. Again unsurprising as I have seen it offered on a large number of clothing sites I have ordered from.
What is buy now pay later (BNPL)?
Buy now pay later (BNPL) lets you spread the cost of a purchase interest-free. And it’s a very popular payment method on many online stores. Sometimes you can spread the cost over 3-9 instalments and pay instalment one straight away. These chunks are sometimes called ‘slices’, and if you miss a payment you might be charged late payment fees.
There are also pay later options where you get an interest-free period of up to 30 days to pay for your order. For example Klarna have pay in 30. Monzo even have their own version of BNPL called Flex where you can spread payments in up to 12 instalments.
BNPL can be a great tool if used in the correct way, allowing you to spread out payments. But it can encourage you to spend money that you otherwise may not have spent. If it’s managed well and you never miss a payment, BNPL can be a free way to borrow money.
Things to consider when it comes to buy now pay later
There’s debate out there about whether buy now pay later shopping schemes are bad. And of the people surveyed by HSBC who both had and hadn’t used a BNPL product, they expressed concern about it making it too easy to overspend or get into debt.
And that’s where a lot of the considerations come in.
Before you use a buy now pay later service think to yourself if you would have bought the item if BNPL wasn’t an option. You need to also consider if you have enough money to make future payments.
You should also read the terms and conditions carefully to understand any late payment fees you could be liable for. And whether it will affect your credit rating if you miss a payment. It’s also a good idea to research different ways of borrowing money, such as 0% credit cards.
BNPL isn’t right for you if you’re in debt or are unsure if you’ll be able to afford the repayments. And ultimately if you’re purchasing something you wouldn’t have otherwise it’s no advisable.
How I have used BNPL
I’ve been using buy now pay later off and on for over five years now. I first discovered it when I used to work at ASOS and clothing is my most used purchase on BNPL. As I tend to send back quite a lot of clothing orders as sizing is so hard to figure out, BNPL makes sense to me. I can order things to try, return what doesn’t fit and then just pay off the balance of what I keep. Then I don’t have to worry about waiting around for refunds to come through.
I have also used BNPL on some larger ticket items such as some pricey gig tickets. Rather than put them on my credit card and maybe have a month to pay it back, I’d spread the cost over six months to make it manageable.
Have you ever used buy now pay later?
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18 responses to “Buy Now Pay Later – Is It Right For You?”
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I love buy now pay later especially when the interest is zero! Most of big retailers already offer BNPL.
So many places offer it, it’s completely common place now x
I honestly have not used buy now pay later system, and it’s my first time hearinf about it. I’m a little bit skeptical, But knowing that you’ve been using it for 5 years makes me at ease.
It really depends on your financial mindset and position, so it may not be for everyone x
I have not used BNPL before. I can certainly see the benefits for bigger purchases as long as you can afford the repayments.
Ok I didn’t even know it was interest free which is why I’ve avoided it but definitely something to consider now. Thank you so much for sharing!
As long as you pay everything on time most of the things like Klarna/ Clearpay etc are interest-free. But I don’t know about other companies which may be region/ country specific x
I haven’t used BNPL but I do think the way that you are using it is actually really wise. It’s all dependent on how you use it and using it right can actually help not hinder.
We do buy now pay later for big purchases, so that we can pay them off over time. It makes things much easier to afford! It’s a great thing to look into
We do the same, it means you can get the product now rather than saving and waiting x
I have used the Buy Now Pay Later option for a couple of different purchases. It is definitely awesome to use for sure when you don’t want to pay the full price right away.
I haven’t heard anything about this, but it definitely help me umderstand about “buy now pay late”. Thank you for the information!
My pleasure x
I think buy now pay later definitey has its place. Especially for large items which you need straight way like washing machines and fridge/freezers
Totally agreed. It’s going to be different depending on your relationship with money but there are situations when it’s really useful x
BNPL has really helped us in the past but its also a pain sometimes. We are trying to pay off some of our finances so we can actually move on and be better off in the long run.
I try not to buy anything I can’t afford, but I think it’s a great system for those who need it.
Oh yeah, you’ve got to do what works for your situation. I tend to use it in a way of rather saving for 10 months, buy now and pay off (if it’s something I really need) x