1 in 3 households avoid credit cards over concern they'll lose track of payments

THE GOVERNMENT HAS ANNOUNCED NEW BUY NOW PAY LATER PROTECTION RULES 13:11, 20 May 2025 Nearly half (49%) of UK adults have used credit, including Buy Now Pay Later (BNPL), to cover essential

household expenses like groceries, childcare, and transport. Starting next year, BNPL companies will need to follow new standards, meaning shoppers will know exactly what they’re signing up

for when they choose to pay for items and services in installments rather than immediately upfront. Emma Reynolds, Economic Secretary to the Treasury, says: "Buy-Now, Pay-Later has

transformed shopping for millions, but for too long has operated as a wild west - leaving consumers exposed. READ MORE: WARNING AS CERTAIN LLOYDS CUSTOMERS SPOT £40 MISSING FROM ACCOUNTS

"These new rules will protect shoppers from debt traps and give the sector the certainty it needs to invest, grow, and create jobs." Amy Knight, personal finance expert at

NerdWallet UK, has warned what to do if you’ve been relying on BNPL for everyday purchases. She explained: “Buy now pay later (BNPL) offers a convenient way to spread the cost of purchases

in a pinch. "Unfortunately, some consumers have become overly reliant on this form of borrowing as the cost of living has risen, with many caught out by high interest charges they

weren't expecting. "According to NerdWallet research, almost half (49%) of UK adults have used credit, including BNPL, to cover essential household outgoings such as groceries,

childcare and transport costs. "For too long, BNPL has been a frictionless way to make purchases that may not sit within buyers’ budgets, with many not understanding exactly what they’d

be charged or when any late fees kick in. It's high time that BNPL providers signposted customers to debt help. She added: "Almost a quarter (23%) of 18-24-year-olds say they

sometimes regret or feel guilty about their purchases, higher than any other age group. "The one-click nature of online shopping, combined with persuasive social media marketing and the

availability of unregulated credit, has sent some young people into a debt spiral. "The lack of affordability checks and regulated oversight has left consumers of all ages vulnerable.

Turning her attention to how the new rules will impact UK households, Amy said that "BNPL providers will be required to assess consumers' ability to repay before extending credit,

ensuring that lending is based on a customer's financial situation. "Increased regulation and greater consumer protection could support greater borrowing confidence, enabling

shoppers who currently shy away from credit to use it as a financial tool. Article continues below "More than one in three (36%) of those who have avoided using credit cards, finance or

BNPL schemes cited worries they might lose control of their spending as the reason why. "While adjusting to new regulation could create a temporary dip, increased consumer confidence

could ultimately drive up sales for ecommerce businesses.”