Customers borrowing to pay off Buy Now Pay Later bills

8 June 2022, 13:13   By Dr Lucy Brown, Editor

New research from Citizens Advice finds that customers are borrowing more money to cover Buy Now Pay Later debts.

More than two in five customers with Buy Now Pay Later (BNPL) credit are borrowing from other lenders to make their repayments.

The most common method of borrowing was on credit card, with more than a quarter of people using cards to help pay BNPL bills.

Citizens Advice are calling for regulation to be introduced to protect customers with clearer information and market-wide affordability checks.

buy now pay later apps
Credit: Tada Images/


According to Citizens Advice research, two fifths of BNPL customers have borrowed money from elsewhere to make sure they can make their BNPL repayments.

They found that younger people were more likely to borrow to make their repayments, with 51% of those aged 18 to 34 borrowing compared to 39% of those aged 35 to 54. For the over-55s, the figure dropped to 24%.

Credit cards were the most popular way of borrowing to pay BNPL debts, with 26% reporting they had used a credit card to cover their BNPL repayments.

However, customers had also used overdrafts, loans and payday loans to pay them, as well as through borrowing from family and friends.

Citizens Advice also found that more than one in ten customers signing up to BNPL services did not fully understand how repayments worked.

This isn't the first time the charity has published warnings on the BNPL sector. In September 2021, they highlighted the fact that debt collectors were chasing BNPL customers and online checkouts were not giving customers the information they needed on credit agreements.


Citizens Advice are pressing for regulations to be introduced in the BNPL sector that would protect customers including affordability checks and clearer information about the credit product at checkouts.

This is something that has been on the agenda for several years now, with the Financial Conduct Authority (FCA) saying in early 2021 there was a pressing need to regulate the BNPL market.

However, while there have been some changes behind the scenes and the FCA secured changes to some terms in the credit agreements offered by the four biggest BNPL firms, wider regulation is still missing from the sector.

A Government consultation ran from October 2021 to January 2022 seeking views on how to proceed with regulation, and feedback is currently being analysed. There is no indication yet when the next steps will be announced.


Buy Now Pay Later options have become far more common at online checkouts than they used to be, with big names like Klarna and Clearpay attracting millions of customers.

There are concerns, however, that customers don't understand what they're signing up for, and this latest research from Citizens Advice suggests that customers are then turning to riskier forms of credit to meet their BNPL obligations.

No market-wide affordability checks exist for BNPL in the same way as they do for credit cards and other forms of credit, meaning customers may be taking on debt they cannot afford.

In addition, critics of BNPL argue the services tap into consumer desires and encourage them to make impulsive decisions that are not in their best interests.

This was seen acutely during the pandemic when Klarna were censured by the Advertising Standards Authority (ASA) for linking their service to mood boosts.

Although Klarna have moved on from that and this month they became the first BNPL provider to report to credit reference agencies, the wider concerns around the sector remain and may only be resolved once regulations are brought in to protect consumers.


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