A quarter of Brits used buy now, pay later services to fund Christmas shopping, setting up a £2.3 billion bill, according to Credit Karma.
The BNPL industry has seen huge growth in recent years, with the likes of Klarna and Affirm becoming multi-billion dollar giants.
According to Credit Karma, Brits who opted for the payment method over Christmas face an average bill of £170 - nearly 40% of their total outlay for the holiday.
Nearly half of under 35s relied on such payment schemes, with men more likely than women to have used the option. Those living in London, the South East and North East of England also used this payment route more than average.
Credit Karma is warning that, unlike regulated methods of borrowing, BPNL products don’t benefit the borrower’s credit score for paying back debt within the interest free period.
This means consumers who rely more heavily on these schemes than regulated agreements might struggle to prove to financial institutions that they are responsible borrowers when it comes to longer term lending like personal loans, mortgages or car finance.
Akansha Nath, head, partnerships, Credit Karma, says: "Buy now, pay later schemes have seen a meteoric rise, but in doing so have attracted attention for being unregulated and potentially risky for consumers who don’t fully understand how the schemes work."
BPNL can negatively affect users' finances in other ways: recent research from Capco reveals that more than half of 18-34 year olds using it have missed a payment and nearly two thirds say it is making them spend more, potentially increasing their chances of getting into debt.