Don't get caught out by new Buy Now Pay Later rules
New affordability checks mean you could be blocked from using Buy Now Pay Later but here are ways to avoid it.
Don’t get caught out by the new Buy Now Pay Later rules
If you’ve used Buy Now Pay Later (BNPL) to buy something since the summer, you will have been checked to see whether you can afford it.
BNPL has always been a form of loan, usually repaid in instalments, but it has only been officially regulated since July.
That means tougher checks on your ability to pay it back.
If you fail those checks, your BNPL purchase will be stopped. If that could happen to you, here are some ways to handle it.
BNPL providers — including Klarna, Clearpay and others — now need regulator approval to operate, which gives shoppers greater access to refunds and independent decisions on complaints if something goes wrong.
But the new affordability checks on every BNPL transaction could also mean you are blocked from using the service for the first time.
The affordability checks vary depending on the purchase, partly according to how much is being borrowed.
With the costly festive season coming up, here is how to avoid being blocked when money and time are tight.
Slow down your spending: ask whether what you are buying is necessary or whether it can wait.
Be more selective about purchases so you do not need a high credit limit to, for example, buy lots of clothes in different sizes.
Cancel subscriptions to avoid getting trapped into using BNPL to cover the cost of earlier payments.
Speak to debt charities for support and to get access to food bank vouchers if you are using BNPL for essentials.
If you are finding it hard to keep up with repayments on any kind of loan — BNPL or otherwise — you should get help before the situation gets out of hand.
It also recommends writing down exactly what you owe, to help you plan how you will repay the money.
There are also tools to check whether you are getting all the benefits and grants you are entitled to, plus a bill prioritiser, external, to show which payments should be made first and what to do if you miss one.
You should also be wary of supposed debt solutions you may see on your social feeds.