Trapped by the promise of ‘interest-free’ payments – Junelle’s struggle with buy now, pay later

The government has confirmed buy now, pay later (BNPL) will be regulated from 2026. The changes mean that shoppers will get greater protection when choosing to pay for products in instalments.  

The new rules come amid concerns about how easy it is for shoppers to build up affordable debt, especially among vulnerable people. 

At Money Wellness, we welcome the move to regulate the BNPL sector.  

Our director of external relations, Sebrina McCullough, said:  

“The introduction of thorough affordability checks and essential consumer protections is a critical step that’s long overdue. 

 “Over the past year, we’ve witnessed a threefold rise in individuals seeking help with overwhelming BNPL debts, many of whom are vulnerable. 

 “We urge BNPL providers to collaborate swiftly with the FCA to implement these changes, ideally ahead of the proposed 2026 timeline.”  

 As millions of shoppers are finally going to be protected by the new rules, we’re sharing one of our customer’s stories that shows why the regulation can’t come soon enough.   

What started as a convenient way to manage her finances quickly turned into a nightmare for Junelle. The mum of three first discovered buy now, pay later (BNPL) through a friend. Like many others, she was drawn to its promise of interest-free payments.   

BNPL companies market this type of credit as a ‘smarter way to shop,’ allowing customers to spread the cost of purchases over time. At first, it seemed like the perfect solution for Junelle, meaning she could provide for her family without immediate payment.  

But that feeling didn’t last. 

Already battling debt, Junelle’s situation became worse after she had to leave her job in December due to personal and mental health struggles. The rising cost of living only added to her stress, making it harder to keep up with household bills and provide for her 13-year-old daughter. Being out of work and receiving universal credit, she became more reliant on BNPL for everyday essentials like food, clothes and basic household items. That’s when her financial situation started to spiral out of control. 

“At some point I bought some white goods for my flat. Nothing luxurious.”  

But with mounting payments to BNPL services, she found herself skipping other bills just to keep up.  

Before she knew it, Junelle’s debt had climbed to over £6,000, including overdrafts and even money from a loan shark she had turned to in desperation. With each missed BNPL payment came another late fee and the anxiety that was already weighing heavily became unbearable. 

“They send you a notification when you miss the payments and they give you an option to pay at a later date,” she said. “But when that date comes and you can’t pay, they put late fees on…. At one point, I tried not to think about it because I just couldn’t cope…. Sometimes I would hear my phone ping but I wouldn’t want to open anything.” 

The pressure of debt forced Junelle to turn to a food bank to feed her family. She regularly visited a local centre in High Wycombe, where she could get a basket of food for £3. But the toll on her mental health got worse, as did her anger toward the BNPL companies that seemed to trap her further into debt.  

Junelle said she felt as if she had been cajoled into using this type of credit and wasn’t made aware that missed payments would result in charges. She feels angry she was allowed to keep making more BNPL purchases when the companies offering her credit must have known something was not right and she was struggling.   

“It’s that quick and easy,” she said. “…You could literally be talking to them on your phone and by the time you get off the phone, within a couple of minutes, the money is there.” 

In June, when her financial situation had become unmanageable, Junelle turned to Money Wellness after a friend recommended our service. After reviewing her case, we suggested a debt relief order (DRO). This meant her debts would be frozen for 12 months and then written off if her financial circumstances hadn’t improved. When Junelle received confirmation that the DRO had been approved, she said the feeling of relief was immense. 

She advises others who may be considering BNPL to think carefully and to get proper information on the company, make phone calls and look into the advantages and disadvantages of BNPL and how it will affect you if you can’t make the payments.  

Junelle says she now feels much more positive about things. “Even if I didn’t get approved for the DRO, I would thank Money Wellness because they were so great in talking to you and advising you on what to do.” she said. “I feel I’m part of the family now. If you find you’re in a mess, contact Money Wellness.” 

Use buy now, pay later carefully  

With 0% interest and the ability to spread payments into manageable chunks over time, BNPL allows people to manage their shopping. When used carefully and within a person’s financial means, it can allow someone to make purchases that may otherwise be unattainable. BNPL can be a sensible way to ensure you’re not hit with big bills all at once, which can be especially advantageous during expensive periods, like Christmas.  

But as Junelle’s story shows, what appears to be harmless credit can quickly become a financial trap and users can too easily end up in debt.  

As living costs continue to rise, more people are using BNPL to cover the basics, including food, fuel and takeaway meals. Popular food delivery services have partnered with BNPL companies, allowing customers to order pizzas, burgers and other meals and delay payment, leading some to spiral deeper into debt after simply paying for a takeaway.   

Statistics by Finder show that half of UK adults had used BNPL services as of April 2024. That’s about 26.4 million people – up from 36% at the start of 2023. More worryingly still, over half of BNPL customers reported being hit with late fees. 

In 2023, 15% of the customers we helped had BNPL debt. In the past 12 months, the number of people seeking debt help with BNPL debts tripled. In the first six months of 2024, we advised more than 130,000 people on this type of debt.  

We’re also noticing an uptick in the number of customers using BNPL for smaller amounts, suggesting, like Junelle, that they’re using this form of credit for food and other living costs because they can’t afford the essentials.  

BNPL and vulnerable and minority groups  

Also concerning is the impact of BNPL on vulnerable and minority groups. Research by Lenvi shows that people who may need special care, support or protection, are twice as likely to use BNPL loans.  

55% of people with a mental health condition and 52% of those with a cognitive disability have used BNPL. In contrast, just one in three people without these conditions have turned to this payment method.  

Earlier research suggests that the uptake of BNPL among these groups may be linked to impulsiveness in people with these conditions, which is typically higher than among people without mental health problems or a cognitive disability. 

What will the new regulations mean? 

Rule changes were first considered in 2021, and Labour criticised the Conservatives for not acting on their commitment to regulate the BNPL space.