TransUnion, the credit reference agency, has published new findings on the usage of buy now pay later (BNPL), as it reveals more than one in four UK adults (26 per cent) now prefer using the technology in lieu of credit cards for everyday spending.
The TransUnion report, which examined 2,000 respondents over 18 from the UK, found that young adults (those aged between 18 to 24) are most likely to rely on BNPL for small, ‘bitesize’ purchases (20 per cent). In fact, four per cent of all respondents said they made purchases of under £25 using BNPL.
Breaking down what a ‘bitesize’ purchase is, 10 per cent said they paid for their weekly shop with BNPL, while nine per cent said they used the tech for takeaways and seven per cent for coffees. Additionally, as petrol prices continue to rise, seven per cent of Brits are paying for fuel with BNPL, while eight per cent rely on it to cover essential travel and commuting.
BNPL is convenient but not necessary
As the school summer holidays beckon, parents are already looking at buying supplies for the next school year. Six per cent of Brits are using BNPL to afford these purchases, rising to 15 per cent of parents between 25 and 34. Nineteen per cent of all parents said they are financially comfortable and are primarily using BNPL for convenience, rather than necessity.
The report also found that BNPL’s ease of use wasn’t limited to parents. In fact, 60 per cent of all respondents cited simplicity as a reason for BNPL’s popularity, with 34 per cent praising its availability. For 16 per cent of consumers, it is a simpler lending alternative to traditional lenders as it requires fewer credit checks. In fact, eight per cent have turned to BNPL after having a credit application declined by a mainstream lender.
As inflation continues to exceed the Bank of England’s target of two per cent, rising to 3.5 per cent in April 2025, up from 2.6 per cent in March, nearly a quarter (23 per cent) of BNPL users put low-cost purchases on short-term credit to manage the rising cost of living. One in seven (14 per cent) use ‘bitesize’ BNPL for budgeting, with this highest among 45 to 54-year-olds (20 per cent), and 13 per cent rely on this payment method to afford essential items.
Evolving regulations
While upcoming regulations are expected to enforce affordability checks and require BNPL loans to be reported on credit files, there’s low awareness of how short-term financing can impact your ability to borrow money in the future. More than one in eight (13 per cent) BNPL users are unaware of how using short-term financing for everyday expenses can affect their credit report and seven per cent admit to missing or making a late repayment for a small purchase.
Madhu Kejriwal, CEO of TransUnion in the UK and Europe, said: “Consumers have embraced the broader choice buy now, pay later services offer. They’re generally easy to use as they provide a good consumer journey and can additionally be a useful option for people with more limited credit opportunities. With its rising popularity, new regulation on BNPL is a positive and timely step to help protect consumers from taking on more debt than they can repay and supports responsible lending.
“BNPL can be a quick way to access credit, and while using short-term financing for smaller purchases isn’t a cause of alarm, missed or late payments, even for low-cost items, are visible on your credit report and may negatively impact future access to credit. Ahead of regulations, it’s key that consumers understand how BNPL loans can affect their credit report.
“At TransUnion, we have a comprehensive view of consumer behaviour and affordability, helping businesses lend responsibly and consumers better understand their credit commitments.”
Using BNPL responsibly
For consumers using BNPL, or considering using it, for small everyday purchases, TransUnion offers some tips:
- Before taking out a BNPL loan, check the terms and conditions, including when you need to pay the money back and if any late payment fees apply. Missed or late payments, regardless of the amount, can be reported to credit reference agencies and negatively impact your credit report
- Small purchases on BNPL can quickly add up, so keep track of how many BNPL accounts you have open. To avoid missing repayments, set reminders or enable automatic payments
- Regularly monitoring your credit report can help you feel more in control of your finances, as well as to understand and help protect your financial standing and know what kind of finance you’re potentially eligible for. You can view your TransUnion credit report and score for free with providers such as Credit Karma, MoneySuperMarket, or TotallyMoney, or you can obtain your free statutory credit report from TransUnion’s website. Additionally, many consumers can freely access their credit report via the mobile apps and websites of high street banks and lenders.
- If you’re struggling to pay off debt, don’t ignore bills or letters about money you owe. Speak to your lender for support or get free, confidential and independent debt advice from charities such as StepChange Debt Charity and National Debtline
