Should I Use Buy Now, Pay Later (BNPL) in the UK? Pros, Cons, and Crucial Info

Buy Now, Pay Later schemes have taken the UK by storm. 

Klarna, Clearpay, Laybuy, and PayPal Pay in 3 are popping up at online checkouts like mushrooms after rain. It’s not just trendy trainers and tech gadgets either. Folks are literally splitting payments on everything from skincare to sofas.

BNPL has carved out a comfortable spot in the online shopping experience. It offers flexibility and ease, and it also has the sweet illusion of getting what you want now without the guilt of instant payment. 

But like most things that sound too good to be true, there’s fine print.

So, is BNPL a savvy financial move or just a modern-day trap in a shiny user interface? Let’s break it down, stitch-by-stitch.

‍

What Is Buy Now, Pay Later and How Does It Work?

BNPL is exactly what you think it is. You buy now, and instead of handing over all your money in one go, you spread the cost over a few interest-free installments. 

Typically, it's three or four payments spread over weeks or months. That’s right…zero interest, as long as you toe the line.

‍

Common BNPL Players in the UK

• Klarna offers “Pay in 3,” “Pay in 30 days,” or finance options up to 36 months.
• Clearpay offers four payments over six weeks. Automatic deductions every two weeks.
• Laybuy allows you to pay over six weekly payments, interest-free.
• PayPal Pay in 3 lets you make three monthly payments on your purchase.

Each one has its quirks, but the idea is the same: smooth checkout, soft credit checks (or none at all), and quick approvals.

What many forget, though, is that this is still borrowing. Just because there's no bank manager in a tie staring you down doesn't mean it’s not a credit arrangement. 

And yes, the Financial Conduct Authority (FCA) has taken notice. Regulations are coming, and BNPL will soon have to play by stricter lending rules, just like with credit cards and loans.

‍

The Pros: Why People Use BNPL

There are reasons these services are booming:

Interest-Free Installments

Let’s be honest, who doesn’t like the sound of “no interest”? If you can stick to the payment schedule, it’s actually one of the cheaper ways to spread out the cost of a new laptop or that “emergency” birthday gift.

Quick and Easy Checkout

No lengthy forms, no awkward questions about income, and no digging out a dusty payslip. Just a few clicks and off you go with a shiny parcel on the way!

Flexibility for Short-Term Purchases

BNPL lets you try before fully committing. That £120 coat didn’t fit? You can return it before the next payment is due, and that way, you’re not out of pocket.

No Immediate Credit Score Impact (For Now)

Most providers use soft credit checks, which means there’s no hit to your credit score just for applying. But (and this is a big but) that might change. With regulations coming, data could soon be reported to credit agencies, which means that your payment history will really matter.

‍

The Cons: What You Need to Watch Out For

It’s not all sunshine and smooth checkouts…

Hidden Debt and Overspending

When checkout feels more like a game and less like spending real money, it's way too easy to get carried away. The approval is instant, the payments are small, and suddenly you're juggling five different BNPL plans with no idea how much you owe.

Late Payments and Fees

Mess up a payment and that “interest-free” promise can turn into late fees quicker than you can ask “where’s my wallet?”

Clearpay and Laybuy both charge late fees, and if you stack up missed payments, you just might get a call from debt collectors.

Credit Score Risks

Right now, most BNPL providers don’t report to credit bureaus. But if your account ends up in collections, it will show up, and it will stick around.

With FCA regulations on the horizon, many expect full reporting to become standard. That means late payments could drag down your credit score just like a missed credit card bill.

The Psychology of Small Payments

This one’s sneaky. BNPL makes a £100 spend feel like £25. It plays with perception. 

Small and bite-sized payments feel manageable, yes, but when they stack up across multiple platforms, it becomes financial spaghetti. And nobody wants to untangle that mess!

‍

Should You Use Buy Now, Pay Later?

It’s not about demonising BNPL. It’s much more about being honest about your financial habits and using it with eyes wide open.

When BNPL Might Make Sense…

• You’ve got steady income and a solid budget.
• You use it occasionally, for planned purchases.
• You know exactly when each payment is due and you don’t miss them.
  
  

When It’s Probably Not a Good Idea…

• You’re already juggling debt or living paycheck to paycheck.
• You’re trying to fix a bruised credit score.
• You’ve got more than one BNPL plan active and couldn’t name the due dates if your life depended on it.

Here’s a good rule of thumb to follow: If you wouldn’t put it on a credit card you can pay off in full next month, maybe don’t BNPL it either.

‍

How BNPL Fits Into Your Credit-Building Journey

Right now, using BNPL doesn’t boost your credit score. It’s not like a loan or a traditional credit card. That might change with future regulation, but for now, the best way to build credit is with products that report to the big three: Experian, Equifax, and TransUnion.

Still, BNPL can help with cash flow if used responsibly. The trick is making sure it’s a tool, not a trap.

Keep an eye on your credit report regularly. If BNPL activity starts appearing, you’ll want to be on top of it. Free services like ClearScore and Credit Karma make it easy to check in without impacting your score too. 

And if you're looking to improve your financial habits or credit score, the Pave app exists. Pave was designed from the ground up to be your number one resource for credit improvement in the UK. Through supported learning, smart protection, and active credit building options, we're dedicated to paving the road to healthier finances so you can worry less about your bank account. 

Find out why hundreds of thousands trust Pave to improve their credit score by getting started in less than three minutes!

‍