If you live in the UK, you may have spotted signage for ‘buy now, pay later’ (BNPL) schemes at the virtual checkout while indulging in online retail therapy. Firms such as Swedish start-up Klarna and Clear Pay offer users the option to split payments without interest in a rebranded form of debt.
BNPL has now been rolled out for goods and services as wide-ranging as groceries, pizza deliveries, botox injections, hotel bookings... and yes, energy bills. The Financial Conduct Authority estimates that 75 per cent of those opting for this ‘buy now, stress later’ debt are women. While the financial watchdog is beginning to scold (lightly) such firms to better advertise themselves as creditors, the knock-on effects to this generation of young debtors are already being seen. A study by Credit Karma, found that 58 per cent of BNPL shoppers were using the service to manage the rising cost of living, while one in three users admitted to getting into unmanageable debt in a study from Barclays and StepChange. Refinery29 reported that young women were being turned down for mortgages for having used the service.
