Something’s gone wrong when people are buying a Big Mac with a loan. But thanks to Buy Now Pay Later, that is exactly what is happening – and I’m worried.
Buy Now Pay Later (BNPL) was introduced in the UK in 2014 as a way to help people spread the cost of essential purchases.
Used properly, it’s a type of interest-free loan that allows people to pay for an item in three or four instalments over a short period, usually between six weeks and three months.
It’s a valuable tool for families managing the household budget, particularly at high pressure times such as Christmas or the school holidays, or where there’s an unexpected outlay, like a car breaking down.
But when you take that original idea and use it to pay for a Happy Meal, you’ve lost the entire purpose.
Today, BNPL accounts for about 8 per cent of online and physical point of sale spending. Around 14 million people in the UK use BNPL each year and 8 million use it for purchases below £50.
According to Money Wellness, the debt charity, one in five people seeking advice have a BNPL loan.
I speak to people, through my work at the Bank of Dave – an independent lending company – who have 50 or 60 separate BNPL loan agreements running. That is not what it was intended for.
Hilary (name changed), a care nurse, borrowed £600 for her children’s school uniforms and shoes. No checks were carried out before she took a BNPL loan. She admits that she even made up a figure for her salary and no one checked. Now her debt has spiralled to £6,000.
How is this possible? Firstly, because there are lots of different providers in the market. Most of them don’t check with each other who already has a loan and many will let you have more than one loan at a time.
Secondly, the affordability checks that you need to pass to get a standard loan, or a credit card or mortgage, just don’t exist for BNPL. That means you can borrow without having to show how you will repay the money.
And finally, many people don’t realise they are taking on debt to use it for increasingly trivial purchases. An interest-free payment plan might sound like a no-brainer, but if you miss an instalment, the late fees can really rack up – especially when you’re juggling dozens of different agreements.
Sooner or later, that will start to impact your credit score, which could stop you from getting a mortgage or even a mobile phone contract. Imagine not being able to get a new phone just because you put a hamburger on finance.
We’ve been calling for regulation for BNPL for years, and next month [July] it is finally due to come into effect. But we don’t yet know what the rules will look like – and I’m worried they won’t go far enough.
How do we stop debt snowballing and BNPL becoming a scandal of the future? I want to see financial promotion rules applied, so that people are clear on what they are agreeing to and understand it is a form of debt.
I want to see protections that cover you for purchases over £100. Currently, if you make a purchase through BNPL and the goods are faulty, do not arrive or the merchant goes bust, you have no protection.
I want people to have the right to complain to the Financial Ombudsman if something goes wrong. And I want to see affordability checks that would make sure that loans are only made where people can prove they can afford to repay them.
If you’re struggling, there are some incredible debt charities like Step Change and Citizens Advice that can help.
In 2026, you can get a Big Mac on BNPL and know you’re not going to pay a penny towards it for a month. But in the second month you will have to pay, and if you fall behind you’ll get charged. Before you know it, you’re paying interest on a Big Mac meal – and that is absolutely bonkers.
Dave Fishwick is a business owner, known for ‘The Bank of Dave’ – a lending company called Burnley Savings and Loans. His story has been turned into two Netflix films.
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