What is Buy Now Pay Later and Should you Use it?

Buy Now Pay Later (BNPL) is a when you buy a product, but instead of paying for it immediately, you can either:

  • Delay payment (usually by up to a month) without being charged any fees or interest
  • Spread the cost over several months for free

Woman uses buy now pay later service to buy clothes online

Most BNPL plans offer interest-free instalments. However, if you miss one of the instalments, extra charges or interest could be added. Moreover, even though Buy Now Pay Later is very convenient, it could become expensive if you miss a payment. Therefore, you should only use it as a final resort if you cannot afford to make the full payment right away.

Don’t confuse Buy Now Pay Later with shopping on credit – where you buy products using credit and then need to pay back the credit with interest added on.

Using Buy Now Pay Later for Clothes

One of the most popular uses for BNPL is for clothes! In recent years, most of the popular high-street retailers have partnered with BNPL providers, such as Klarna, to allow customers to pay for their clothes shopping in up to 3 interest-free instalments. Some of these include ASOS, H&M, Topshop and Boohoo. 

Buy Now Pay Later has revolutionised online retail completely. Previously, customers who could not afford to pay for their full shop immediately would have to rely on credit cards, overdrafts or high-cost loans to make their purchases. Now, they can pay for their shopping in manageable instalments with no extra interest!

Pay Later – Trying Clothes Before Buying Online

Another popular option you can use when shopping for clothes online is to ‘try’ the clothes. If you don’t like them, you can return them within the returns period without being charged! This means no more having to wait 30 days for your refund to be processed when you return online orders!

If, however, you keep the items, they will charge you the full amount when the returns period expires. Most of the retailers who work with Klarna to allow split payments also offer this ‘Pay Later, Try Now’ option.

Is there a credit check when using Buy Now Pay Later?

Yes. Since the retailer needs to make sure that you can actually pay for your purchases and that you have a good repayment track record, you will always be credit-checked when you first sign up for the service. However, once you have an account, you won’t be credit checked every time you make a purchase. Of course, if you miss any payments on your Buy Now Pay Later payment plan, this will be marked on your credit report and can negatively impact your chances of being accepted for credit in the future.

Does BNPL with no credit check exist in the UK?

Although there are BNPL providers who will advertise that they don;t carry out a credit check, they may not be safe to use. The biggest and most reliable BNPL providers carry out a credit check for your own safety, to make sure you are not overcommitting to financial obligations you will not be able to fulfill. By using a no credit check BNPL provider, you are putting your financial security at risk, and you may also be charged much higher rates if you miss a payment.

How to Buy now Pay Later

There are two ways you can use a BNPL service:

  1. You can shop online with a retailer that directly offers Buy Now Pay Later, such as Very, Argos, Amazon, Next or Currys
  2. You can shop online with retailer that works with a BNPL provider, such as Klarna or Clearpay.

Looking to bring up your credit? Read our UK credit score guide for 2020 here.


Jump To A Category

Quick Read: Money Magazine