Buy Now Pay Later (BNPL) agreements are a way for you to buy goods on credit and pay for them later. This might be through regular interest-free instalments or after an interest-free period.
This is becoming a common payment method at some high-street shops, but it’s more commonly used by catalogues and online retailers. Their products are often aimed at young people and families.
Buy Now Pay Later providers include Klarna, Clearpay and Laybuy. These companies offer a range of payment options. Some agreements will let you pay after a set period of time (hence the name), while others will let you pay for your purchases in instalments (sometimes called ‘slices’).
BNPL can be useful, for example, by providing the chance to take up sale offers when you don’t have cash available to pay there and then.
But remember, if you don’t make payments on time you might have to pay penalty fees or charges. Any rights or protections you have will depend on the your chosen payment option.
That’s why it’s really important to keep track of:
- how much you’ve paid
- how much you still owe
- your repayment dates
- how many different Buy Now Pay later agreements you have.