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Wednesday, October 5, 2022

A Third of Scottish Consumers Admit To Using BNPL For Eating Out

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Buy now pay later schemes are tempting Scottish shoppers into taking on unsustainable debt.

See the Shop Now, Stress Later Study by Money.co.uk here.

The study reveals:

28.99% of consumers in Scotland admit to using BNPL for eating out

Shoppers in Edinburgh used BNPL for eating out the most with 28.13% spreading the cost of food and drink

30.56% of shoppers in Glasgow were using BNPL for spreading the cost of travel

14.29% of Scottish shoppers are in debt of between £200 and £300 with purchases made using Klarna

75% of Scottish respondents admitted that they did not feel very confident about paying back their Klarna debt

Edinburgh and Glasgow are the biggest tech spenders with 50% using BNPL payments

One in five (20%) of the shoppers admit BNPL is a way to buy now, and worry later

25-34 are the biggest BNPL users.

Over two-thirds have used a BNPL payment scheme like Klarna, Clearpay, or Laybuy

Almost a third of UK shoppers cite social media as a contributing factor (29%) in their decision to use BNPL

The average debt to BNPL platforms is £176.05 taking eight months to pay off

Marks & Spencer, Samsung, and Nasty Gal are amongst the brands promoting BNPL the most

Salman Haqqi, a personal finance expert at money.co.uk said:

“While Buy Now Pay Later schemes, like Zilch, Klarna and Clearpay, are quick and easy to join and seemingly harmless, they are in fact an entry point to debt for many.

“Their quick and easy signup process, minimal credit check, and youthful marketing appeal could be causing shoppers to sign up and spend more than they can afford without understanding the full risk.

“When taking on any sort of debt, it is important that you understand the risks in full otherwise you could end up in a cycle of debt that you can’t get out of.

“Our recent study shows that those who use Buy Now Pay Later services tend to overspend or purchase more than they otherwise would, as they have the option of breaking the payment into smaller chunks.

“Customers should note all of the terms and conditions and understand completely what they are signing up for to ensure that they are using the service correctly.

“For shoppers who are confident they can handle the repayments then it might not be a problem, but this is not always the case and there will be those who may not be able to pay off what they spend, and this puts them at risk.”

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