One in 10 relying on Buy Now Pay Later for Christmas - here are Citizens Advice’s six need-to-knows

Almost one in 10 people in Great Britain (9%) are planning on using Buy Now Pay Later (BNPL) for part of their Christmas shopping, Citizens Advice has found. 

Out of the 43% resorting to borrowing to help cover Christmas this year, one in five said they'll be turning to BNPL to pay for at least part of their shopping. 

Yet despite the Buy Now Pay Later sector growing rapidly, it remains unregulated. This means people have less protection as opposed to more traditional forms of regulated borrowing, such as credit cards and overdrafts.

Citizens Advice is calling for the sector to be urgently regulated to make sure consumers are properly protected. It has released six need-to-knows for anyone thinking of using one of the schemes this Christmas.

Kate Hobson, Consumer Expert at Citizens Advice, said: “Money can often be tight in the run up to Christmas, but it’s still really important not to spend more than you can afford. 

“If you’re considering using Buy Now Pay Later, make sure you understand what you’re signing up for, how you’ll make the repayments and what will happen if you can’t pay on time.

“As always, if you’re struggling with any kind of bill, get free, independent advice as soon as possible. Our advisers can help you understand your options and come up with a plan.”

She outlined six need-to-knows for anyone planning on using BNPL:

  1. Understand what you’re signing up for. Check how and when you’ll need to pay, and if you could be charged late fees or interest. It’s also worth noting your credit score could be affected if the BNPL firm reports late payments, or if you’re referred to a debt collector for missed payments, and you then don’t pay the debt collector.

  2. Have a plan for how you’ll repay. While it can be tempting to split payments, make sure you have a plan for how to pay the money back - particularly if your circumstances or income were to change.And if you're using BNPL repeatedly or using multiple BNPL options, make sure you know how much you owe in total.

  3. If you’re struggling to pay, get help ASAP. If you’re worried see Citizens Advice Help with Debt , or contact your nearest Citizens Advice as soon as possible. You should also ask the BNPL firm if it can help, such as lowering your monthly payment or waiving a late fee. But this could mean you’re charged interest etc, so always make sure you understand what you’re agreeing to.  

  4. If you need to cancel or return items, contact both the retailer and the BNPL firm. This is because your consumer rights are with the retailer, but you have a separate agreement with the BNPL firm to pay for what you buy. Generally the retailer will refund the BNPL firm, which will refund you, or adjust the amount you owe if you only returned part of an order. 

  5. If something goes wrong you can complain to the BNPL firm and the retailer. Again, your consumer rights are with the retailer, but your payment agreement is with the BNPL firm. BNPL firms have different rules on resolving disputes and so check what happens to your payment plan during this time. You could also try the Chargeback scheme that is offered by card providers to help get refunds (though there are no guarantees it’ll work) and you’ll need to continue paying the BNPL firm to ensure you're not in breach of contract.

  6. If you pay with a credit card beware of extra fees and less protection. Credit card purchases over £100 generally have Section 75 protection, which means the credit card provider may have to help if something goes wrong. But this protection doesn’t apply to BNPL purchases as you didn’t pay the retailer directly. You may be able to use the Chargeback scheme instead. It’s also worth noting that some credit card firms may charge interest or a fee for paying your BNPL bill with your credit card - so it’s worth checking before opting for this payment method. 

Notes to editors

  1. Yonder Data Solutions surveyed a representative sample of 2,029 GB adults online between 8 and 9 November 2021. It was weighted to be demographically representative of all GB adults aged 18+. 

  2. Citizens Advice is made up of the national charity Citizens Advice; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.

  3. Our network of charities offers impartial advice online, over the phone, and in person, for free. 

  4. We helped 2.4 million people face to face, over the phone, by email and webchat in 2020-21. And we had 40 million visits to our website. For full service statistics see our monthly publication Advice trends.

  5. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,600 service outlets across England and Wales.

  6. You can get consumer advice from the Citizens Advice consumer service on 0808 223 1133 or 0808 223 1144 for Welsh language speakers.