Buy-Now-Pay-Later Debt

Buy-Now-Pay-Later – The illusion of being able to afford more

How does BNPL work?

Interest free buy now, pay later options have started appearing on a variety of big online retailers.

One of the most common is Klarna which allows shoppers to pay in either 30 days’ time, with their bank or credit card, or to pay for their shopping in three equal payments, the first taken immediately and the next two 30 and 60 days later.

With 8.6 million Klarna customers in the UK, buy now, pay later is one of the fastest growing methods of payment. When using Klarna, the consumer pays no interest and the retailer foots the bill. They also pay Klarna up to 5% of each sale plus a fee.

It sounds simple enough – but Moneydashboard called it ‘the illusion of being able to afford more’. Are people being tempted into buying more things than they can actually afford?

Is Klarna Safe?

It depends what you mean by safe. Is it a legit company? Yes. Is it safe for your wallet? hm, not so much.

When you’re shopping with a buy now, pay later company, chances are, you’re not worried about how you’re going to pay the full amount for something. At least not yet. That’s why you decided to use Klarna in the first place. But buying now and paying later for things is just delaying the inevitable which is having to worry about where that money is going to come from later.

What did we found out from our survey to the Members & Public?

In September, Derbyshire community bank focused on finding out whether our members thought Buy Now – Pay Later was a positive option or negative & if our members had used it in the past? We created a member & non member survey to send out to find out.

Over the span of 2 months we ran the survey on a continuous basis which we then we received many responses from both long-time members and people that have just joined our credit union & the general public.

Firstly, we would like thank everyone who participated and provided valuable feedback that makes it easier for us to get an understanding of what we are doing and what we can potentially do better.


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