Many shoppers take a strange comfort of buying now and paying later – but it can come with a sting after Christmas

It’s that time of year again, and retailers are pulling out all the stops to get us spending – from Black Friday to new year’s sales.

The average Briton expects to shell out around £300 on Christmas gifts. But as budgets tighten, more people are turning to buy-now-pay-later schemes to spread the cost over time. Our research has uncovered how these services have become woven into many people’s festive spending.

One shopper told us how a brand’s email about an early Black Friday discount led her to buy items she had been considering for a while, as the reduced prices made the decision feel too good to pass up.

But not everyone can afford this seasonal spending spree. About a third of Britons worry about the financial hit of Christmas. Many turn to credit cards or overdrafts. And that’s now being joined by the fast-growing buy-now-pay-later options to make ends meet.

One man said he had built up about £120 in buy-now-pay-later debt after picking up “bits and bobs” for Christmas, and hoped his total spending wouldn’t climb beyond £500 this year.

By the end of 2025, more than half the UK population will have tried buy-now-pay-later. It has become mainstream across all ages and incomes, reaching this status in just over a decade. This is much faster than credit cards, which took decades to catch on. This Christmas, buy-now-pay-later’s influence is impossible to miss.

Frictionless credit at the click of a button

But why has its use spread so quickly? One reason we discovered from our interviews with shoppers is because it’s incredibly easy to access. Minimal checks and balances mean almost anyone can sign up, though regulation is on the way.

One woman said what drew her to buy-now-pay-later was how effortless it felt. The service was readily available, convenient and allowed her to manage costs she otherwise might not cover upfront.

Buy-now-pay-later isn’t just easy, though – it’s everywhere. Whether you’re shopping online, in-store, at global brands, or with local sellers, buy-now-pay-later is available at the checkout. Some even feel it’s safer than entering card details online: “I believe, or I see it as a safer way to pay in the sense … prevents me from entering in my card details … on the website.”

Buy-now-pay-later providers also sweeten the deal with special promotions, and their apps let you use the service even when stores don’t officially offer it. For many, it’s become an essential part of holiday shopping. As one participant told us: “Now the festive season approaches, the utility of buy-now-pay-later schemes becomes especially evident in my Christmas budgeting.”

For some people, buy-now-pay-later is a lifeline for impulse buys and last-minute must-haves. One respondent explained that it had made her recent clothes shopping easier. She had ordered multiple outfits for a Christmas event, kept just one and returned the rest. She said it was reassuring that no payment had been taken while she waited to make her final choice.

Buy-now-pay-later also helps people stretch their budgets, especially when giving gifts is tied to family expectations or self-indulgence. An interviewee told us that she often uses it in the run up to Christmas, when she needs to buy several gifts but doesn’t have the funds available all at once. To her, it made the service particularly useful during the festive period.

Still, not everyone is comfortable borrowing to buy gifts, as one person told us: “When I buy gifts, I prefer to have them paid instantly as one-off payments as opposed to over time because I think in my head when I’m giving the gift, I don’t want to think about, you know, two months later I’m still paying for that gift.”

Others see a downside to the buy-now-pay-later habit: “What I don’t really like about Klarna at times is the fact that it’s kind of addictive … I can feel myself getting attached [to] the idea of paying later rather than straight away, because I feel like I’m technically not spending.”

The lure of ‘future money’

Buy-now-pay-later can also appear to soothe the sting of spending. Instead of feeling the pain at checkout, you get to delay it, and sometimes until well after the festive glow has faded.

Young people, especially generation Z (born between 1995 and 2009) and millennials (born between 1980 and 1994), often see buy-now-pay-later as a modern way to access their “future money”, quite unlike the old-school credit card.

But the bill always comes eventually. Overdoing it with buy-now-pay-later can leave you struggling to keep up with repayments, especially if you’ve bought more than you can afford.

Our research found that frequent users are more likely to incur late fees, interest charges and have current money worries. Young users may lack financial skills, but they’re optimistic about bouncing back. Sometimes too optimistic.

We all want a joyful Christmas. Buy-now-pay-later can help, but it’s no magic wand. Rely on it too much, and you may start the new year with more debt than you bargained for.

Anita Lifen Zhao has received funding from the British Academy. She is an Associate Professor in Marketing at the School of Management, Swansea University. The University is an affiliate member of the Money Advice Liaison Group.

Philippa Ward has received funding from the British Academy. She is a Professor of Marketing at the School of Business, Computing and Social Sciences, University of Gloucestershire. The University is an affiliate member of the Money Advice Liaison Group.

Ruffin Relja is a Senior Lecturer in Marketing at the School of Business, Computing and Social Sciences, University of Gloucestershire. The University is an affiliate member of the Money Advice Liaison Group.