Black Friday Alert: Debt Charities Warn Against Buy Now, Pay Later Temptations!

Caution Advised for “Buy Now, Pay Later” Deals During Black Friday

As Black Friday approaches, shoppers are being urged to be cautious of the numerous “buy now, pay later” (BNPL) promotions that appear during checkout, as financial advice services report an unprecedented number of individuals seeking help for debts incurred from shopping.

In the forthcoming weeks, British consumers are forecasted to spend billions both online and in physical stores, with over a third indicating plans to utilize BNPL services to manage their spending for Black Friday.

However, organizations focused on debt relief and charitable groups are stressing the importance for consumers to think twice before opting for BNPL solutions at checkout.

Citizens Advice has noted an all-time high in the number of people coming for help with issues related to BNPL schemes. The organization advises extreme caution, particularly for those who are already finding it difficult to manage their bills.

Similarly, Money Wellness, a non-profit providing free financial and debt counseling, reported last month as a record-setting period for BNPL debt inquiries. They anticipate another surge in the months of January and February as the financial impact of holiday expenditures starts to show.

The popularity of BNPL options has surged dramatically in recent years, with banking data revealing a jump from 14% to 25% in UK adult users within just a year.

This form of credit, predominantly prevalent at online checkouts and now increasingly available in physical stores, allows consumers to spread out payments for a wide array of purchases, from clothing and sneakers to concert tickets and even hotel bookings.

Typically, the expense is divided into three or four payments. If consumers adhere to their payment schedule, they usually incur no interest or fees. Nevertheless, regulators and consumer protection agencies have expressed concerns for some time that certain individuals may commit to financial obligations they are unable to fulfill, thus accruing fees, falling into debt, and harming their credit ratings.

In the UK, over 3 million customers failed to make timely payments in 2024, with some facing pursuits by debt collectors.

With the American-inspired shopping spree beginning with Black Friday on 28 November, followed by Cyber Monday on 1 December, and a final rush of holiday shopping, this period marks a significant boost for the BNPL sector, which is led by three major players in the UK: Klarna, Clearpay, and PayPal.

UK shoppers are expected to spend £6.4 billion on Black Friday this year, a slight increase from the £6.3 billion recorded last year, according to predictions by accountancy giant PwC UK.

The average BNPL transaction is £114, as per data from UK Finance, with nearly half of all such credit spending last year attributed to fashion items including clothes, shoes, and jewelry.

Jane Parsons of Citizens Advice highlighted the transition of BNPL from a niche payment method to a mainstream option for consumers eager to seize the latest deals. However, she cautioned that it remains a credit form and could significantly impact one’s budget, with minimal safeguards if complications arise.

Although often interest-free, BNPL is “definitely not without its risks,” according to Vikki Brownridge at StepChange.

For some, managing multiple BNPL payments on top of rent, bills, and other debts can quickly become unmanageable, noted Sebrina McCullough at Money Wellness.

She further explained that having several BNPL accounts with various payment dates can complicate budgeting and make it easy to miss payments. Late or missed payments usually come with penalties, potentially leading to a rapid accumulation of debt before the consumer realizes.

The Financial Conduct Authority is set to begin regulating BNPL on 15 July 2026. This will likely require lenders to perform affordability checks on even small loans, marking an end to a period where such consumer protections were absent. From then on, BNPL agreements will be considered regulated credit agreements.