Buy now, pay later (BNPL) is a form of credit that gives you more time to pay for a product or service, meaning you can spread the cost of your shopping, which can help with cashflow. It can be completely free for you to use because a number of BNPL providers don’t charge interest or fees for using their service. BUT if you miss a payment, most providers DO charge late payment fees, which may negatively impact your credit report and score. It’s important to keep in mind that BNPL is a debt so in order to manage and repay this debt, it’s vital that you have a repayment plan in place. Ask yourself … Do I really need this item? Will I be able to meet the repayments? Is BNPL the best way to pay when compared to 0% credit cards or 0% overdrafts? If any of your answers are “no” then BNPL is probably not right for you. It’s also important to note that the BNPL sector isn’t currently regulated so lacks some vital consumer protection, for example the safeguard of purchases of £100 or more that you would get with a credit card and the ability to escalate a complaint to the Financial Ombudsman. If you need advice or help with any problem debt, contact GMMAP today. Getting in touch is easy. You can find your local office here.
