More than two in five buy now, pay later (BNPL) customers borrowed money to make repayments, Citizens Advice has found, fuelling fears of a looming credit crisis among cash-strapped consumers.
The types of borrowing included overdrafts, borrowing from friends and family, loans and payday loans. The most popular was credit cards (26%).
Younger shoppers were most likely to borrow to pay off BNPL purchases. The charity found 51% of 18-34 year olds borrowed money to pay off BNPL debt, compared to 39% of 35-54 year olds and 24% of over-55s.
Citizens Advice is calling for regulation to protect customers, including market-wide affordability checks and clearer information at checkouts.
Dame Clare Moriarty, chief executive of Citizens Advice, comments: “Shoppers are piling borrowing on top of borrowing, and sinking into ever more desperate situations that can feel impossible to escape from.
“The spiral of debt from buy now, pay later to credit cards, loans and even payday lenders shows it’s not a risk-free alternative. buy now, pay later is part of the credit industry and must urgently be regulated as such.”