Warning over use of credit cards to cover 'buy now, pay later' payments
Young shoppers risk building up debts by borrowing money to make buy now pay later repayments, Citizens Advice says.
Although the results were drawn from a survey, the charity said the answers highlighted the issue of people relying on one debt to cover another.Buy now pay later has become a commonplace method of payment and credit for UK shoppers in recent years. It allows people to pay for purchases in instalments over a short-term fixed-payment schedule, and interest-free.
Millie Harris, a debt adviser at Citizens Advice in East Devon, said: "Most of the people I speak to who are using buy now pay later live off overdrafts and credit cards, so are using these for repayments. It is just relying on one debt to pay off another debt. Since the start of June, banks and credit companies have been able to see whether shoppers use services from Klarna - the biggest buy now pay later company in the UK.
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