Staring at the spreadsheet my partner has meticulously crafted for a once-in-a-lifetime trip to Thailand and Vietnam, I’m working up the guts to tell him the truth: I just can’t afford it. While the costs of accommodation, food and activities seem manageable, there’s no way I can spend such a large sum of money on long-haul flights, even on a credit card.

Rather than tell him this immediately, I scour the internet for ‘long-haul flights buy now pay later’. I quickly realise this isn’t an option for the itinerary we have planned, and while I feel disappointment, I’m actually relieved. I know I would struggle to keep up with the repayments.

Buy now, pay later (BNPL) services are becoming increasingly popular in the UK. Research by Finder reveals that one in two UK adults have used BNPL. But, with certain BNPL providers coming under increasing scrutiny for operating in an unregulated market where people can incur large amounts of debt, are these schemes facilitating a way for us to spend more than we can afford?

The answer isn’t simple. For large purchases, BNPL services can help customers spread payments over several months to make them more manageable, which seems like a sensible idea on the surface. “I’ve used BNPL before to help me break up bigger purchases,” Abbie, 30, tells me. “It helped me spread a £150 payment over three months, which was really useful.”

But, while Abbie found splitting payments for a big purchase helpful, she expresses concern about the way some of the BNPL businesses advertise their services. “They glamourise it so much, especially when you’re able to use it for any amount. You could say that’s a good thing as it makes products accessible, but it can come with the very real cost of getting people onto the slippery slope of debt.”

This is a sentiment that Poppy, 24, echoes. “I understand there’s an element of personal responsibility, but the way these companies advertise makes it seem like anything is affordable when it’s not,” she says. “If I can’t afford something now, who can say whether I’ll be able to in a month’s time? Things add up so quickly when you can use BNPL for a £20 takeaway order.”

Poppy also expresses concern that some BNPL services don’t make it clear that until every instalment is cleared, you have committed to a loan that can lead to debt if it is not paid back on time. “We normalise the use of these services but, like a credit card, it has to be paid back in full to avoid being in debt,” she says. I know people who spend hundreds via BNPL every month, and they’re stuck in a cycle of debt when payments are due.”

The people that Poppy knows who are getting into debt after using BNPL certainly aren’t anomalies. Debt advice platform MoneyPlus reports that 41% of its new customers have BNPL debts, with the average user on the platform holding 2.4 BNPL debts in January 2024, up from 1.3 the previous year. Debt charity StepChange has also seen an increasing number of people approaching it for advice about this type of debt and takes issue with how BNPL schemes advertise their services. “Because BNPL is unregulated, affordability checks and rules around marketing are not consistent, which puts consumers at risk if they may be borrowing more than they can afford,” explains Simon Trevethick, head of communications at StepChange. “BNPL can often be heavily marketed to shoppers at the checkout, not giving them due time to consider whether they’re in a position to take out credit or the repercussions of missing repayments.”

So, what is driving us to use these schemes, are they affordable and what can be done if you’ve found yourself in debt because of them? I spoke with experts to find out.

Part of the appeal of BNPL is that it has the practical element of allowing people to spread costs. However, to understand why so many people are turning to it, I asked Vicky Reynal, a financial psychotherapist and author of Money On Your Mind: The Psychology Behind Your Financial Habits, to explain the psychological drive behind it and why people are spending more than they can afford. “BNPL can be very appealing when it allows us to have something we couldn’t otherwise afford in the here and now,” she says. “It can, for example, be particularly appealing to the impulsive spender seeking instant gratification and the so-called spender’s high. This isn’t just a psychological process but a neurological one, giving us a rush as the brain’s dopamine system is activated.” Reynal adds that once some people start spending like this, it can be hard to stop. “The good feeling isn’t soured by the pain of payment: the BNPL scheme relieves the buyer of the direct impact of their spending on their finances by essentially ‘postponing the pain’, helping the cost feel vague and distant rather than immediate and concrete. For some, it’s based on unfounded optimism about their financial future,” she says. 

It’s all too easy to fall into the habit of spending this way when these services are so readily available to us. “Over the past few years the popularity of BNPL schemes has grown with a wider range of retailers – including clothing, beauty brands and takeaway sites – offering it as a credit option at the checkout,” says Trevethick. With so many retailers offering BNPL as a means of payment, these schemes can be used for products we want rather than need, which could easily be feeding into the spender’s high that Reynal describes.

But, another worrying trend is emerging as people turn to BNPL to fund essentials. “We’re seeing a sharp rise in people using BNPL services just to cover everyday essentials,” says Jonathan Mills, CCO at MoneyPlus. “It’s not just about buying non-essentials anymore – many are relying on BNPL to make ends meet, which shows just how financially stretched they are.” He also echoes Trevethick’s call for regulation, saying there is an “urgent need for stronger regulations and better education to help people avoid falling deeper into financial trouble with BNPL”.

Before you make a purchase, Reynal recommends asking the following three questions:

What am I hoping this item will get me? 

“The answer might be joy, a sense of achievement or to make me more likeable or desirable,” Reynal says. “Whatever the answer, with an open mind, ask yourself if this item is really going to help you gain any of these things. The answer might genuinely be ‘yes’, but in some cases, you might quickly spot that you were about to make a mistake.” Reynal also advises that if the answer is ‘yes’, consider whether BNPL is the best way to purchase it. “Maybe rent a designer item for a party instead of buying it or buy something secondhand instead,” she suggests.

What am I giving up by making a commitment to pay off this item? 

Consider what you’ll have to compromise on by paying for this item. “It could be some other financial goal that now gets pushed down the line or an emotional trade-off, like living with the uncertainty or anxiety that you might not be able to afford the holiday you had in mind for next year,” says Reynal.

Can I afford it?

This may seem the simplest question, but really scrutinise this. “Are you sure you can afford it even if the payment is split in small chunks or is affordability based on unfounded optimism,” asks Reynal. “Be realistic about the prospects of your ability to pay it off. Basing it on past experience is probably safer than basing it on hopeful future assumptions. In other words, are you overestimating your future financial capacity?”

As both StepChange and MoneyPlus have found, an increasing number of people are approaching debt charities and money management platforms to seek help for BNPL debt. If you find yourself in a position where you’ve fallen behind on payments or simply can’t afford them, Trevethick suggests the following steps.

Audit what you owe

“Firstly, if you’re struggling with BNPL debt, don’t panic. Free advice and support is available,” Trevethick says. “A good starting point is to create a detailed budget containing your monthly income and expenditure to see where you may have money left over to repay debt. Then make a list of all of your BNPL debts to get a clear picture of what you owe. It’s important to note that if you have priority debts such as energy, rent, council tax or mortgage, these should always be repaid first before any BNPL or other consumer credit debt.”

Consider where you can save money

“See if there are ways to make savings – it could be as simple as doing your food shop at a cheaper supermarket, checking if you’re eligible for a social tariff on your broadband or cancelling unnecessary subscriptions,” Trevethick advises. “It may be beneficial to put some money aside each month to cover things you would normally use BNPL for to reduce your reliance on this type of credit.”

Don’t be afraid to reach out for help

“If after going through your budget and making any savings you don’t have enough to repay debt, you may benefit from seeking free and impartial debt advice from a charity like StepChange,” says Trevethick. “You can seek advice online or over the phone, where we’ll go through a realistic budget and, based on your circumstances, suggest ways to deal with your debt.”

Images: Getty