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Is ‘buy now, pay later’ becoming a debt trap? A third of UK users say repayment is ‘unmanageable’

Is ‘buy now, pay later’ becoming a debt trap? A third of UK users say repayment is ‘unmanageable’

As the name suggests, the meaning of “Buy Now, Pay Later” transaction is simple. It means offering installment loan at the place of purchase. The process leads to the spread of the cost of the product(s) over several payments. But is it becoming a debt trap? Yes, UK-based research suggests it can.

In a report in The Guardian, research has been published which states that nearly a third of buyers using BNPL credit are struggling with payments. He said repaying the loan has become “unbearable” with the continuous rise in the cost of living in the country.

According to research, consumers are spending more through BNPL as buyers who use this type of credit now pay an average of 4.8 purchases. This is almost double the 2.6 purchases made in February. The report mentions that the average BNPL user’s outstanding balance is currently £254.

Per the report, Barclays Bank and debt charity Stepchange have said it was “concerned”. He said 30 per cent of Britons have used BNPL to buy goods. Of the total, 31 per cent, which is about a third, are saying that borrowing had put them in problem debt.

The research also highlighted the retailers’ side as the BNPL offer, which is a form of lending for them, is expected to account for about a quarter of their sales by the end of this year.

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Is ‘buy now, pay later’ becoming a debt trap? A third of UK users say repayment is ‘unmanageable’

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