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Buy now, pay later is often advertised as a way of delaying payments on clothes or gadgets, but a leading UK charity has reported a concerning rise in people using the short-term credit for food shopping.
One in twelve Britons are now using BNPL to cover everyday essentials, according to Citizens’ Advice, with vulnerable adults relying on the service most.
It also found that young adults, bk8 review those in debt and those on Universal Credit were twice as likely to use BNPL for essentials than the general public.
BNPL schemes are now offering higher credit limits without credit checks — leaving the financially vulnerable at risk of falling into significant debt, says Citizens Advice
The charity said its frontline advisers had reported increased use of BNPL services, which include Klarna, Clearpay and Laybuy.
It said there were examples where parents had used the delayed payment schemes to buy baby clothes while waiting for a benefit payment, for example, and that those in debt were using BNPL to do food shops.
Some firms offering the BNPL payments are also contacting customers, some of whom are vulnerable, to tell them they can increase their credit limits by hundreds or even thousands of pounds.
Citizens’ Advice gave the example of a pensioner, Audrey, who used BNPL for her £40 food shop when she was running low on funds.
Despite struggling to repay her debt, it said the provider had since bombarded her with offers to borrow hundreds of pounds more.
The pensioner said: ‘It was either use BNPL or starve, so I used it.
‘I sort of knew I would struggle to make the repayments but I did not have any other way of getting food.I bought canned food as they are non-perishable and would last me longer.
‘I have been struggling to repay the money. They constantly harass me, calling me for payments. It’s really stressful as if I could afford to pay it back straight away, bk8 login I would.
‘This company also sends me texts and emails offering £100 credit and even £500.It makes no sense as I can’t even manage to repay £40, how would I repay £100 or even £500?’
‘I’ve been swarmed with offers of higher credit limits’
Younger customers are also being offered the higher credit limits.
Lewis, 28, who works at a legal start-up in London said he had been offered a credit limit of up to £2,000 through one BNPL provider.
He said: ‘I used a buy now, bk8 indonesia pay later service to help buy some furniture when I moved house last year.It’s an expensive process, and I just wanted to split the cost of a couple of items over a three-month period.
Credit cards have the advantage of section 75 purchase protection, as well as having the potential to improve a person’s credit score if used responsibly
‘Since then, I have been swarmed with offers and notices of increased credit limits as the providers are trying to get me to use their services again.
‘I worked with StepChange a few years ago to help clear my gambling debts, so I’m very cautious of how I spend and where I lend from in the future.This whole thing seems very predatory for those who may be struggling with their finances.
‘If I’d still been in thousands of pounds in debt when these services were popular, I doubt I’d have ever cleared it.
‘These companies don’t know my history so I don’t think its right that they should be offering such high credit limits when they don’t know if the person borrowing is able to repay them comfortably.
A pensioner has reported being bombarded with offers of higher credit limits by a buy now, pay later provider — despite struggling to repay her initial debt (image posed by model)
Citizens Advice has been calling for urgent regulation of the sector, including for consistent, market-wide affordability checks and for BNPL firms to make the consequences if things go wrong clearer for consumers.
Dame Clare Moriarty, chief executive of Citizens Advice, said: ‘The fact that people are turning to buy now pay later for their groceries really hammers home the urgent need for industry regulation.
<div class="art-ins mol-factbox money" data-version="2" id="mol-67b43f50-a070-11ec-9a14-f568d375c27d" website was BNPL or starve' — one in 12 use BNPL to pay for groceries