Auto Amazon Links: No products found.
Since the summer, anyone making purchases using Buy Now Pay Later (BNPL) services has undergone stricter affordability assessments. Although BNPL has functioned as a form of credit—usually repaid over time in instalments—it only became officially regulated starting this July. This regulatory change requires lenders to check more thoroughly whether buyers can afford their repayments before approving purchases. If a consumer does not meet these affordability criteria, their attempted BNPL transaction can be declined.
Under the new rules, BNPL providers like Klarna and Clearpay must obtain approval from regulators to continue operating. This move enhances consumer protections by giving shoppers better access to refunds and independent dispute resolution when issues arise. However, it also means that affordability checks will be performed on every BNPL transaction, which could result in some buyers being blocked from using these services for the first time. The exact nature of these checks varies depending on how much credit is being extended with each purchase.
If you find your BNPL account has been shut down or your borrowing limit significantly cut, there are some practical steps you can take to handle the situation. Sara Williams, a former volunteer debt adviser at Citizens Advice who shares advice online as Debt Camel, recommends a measured approach. She suggests slowing down your spending to focus only on essentials or postponing non-urgent purchases. Being more selective with what you buy can help you avoid needing a large BNPL limit, such as by not shopping for multiple clothing sizes at once. Canceling ongoing subscriptions might prevent you from relying on BNPL to cover previous payments, and reaching out to debt charities could offer vital support, including food bank vouchers if you use BNPL for essential goods.
If managing repayments becomes difficult, it is important to seek assistance early to prevent your financial situation from worsening. The government-backed MoneyHelper website provides guidance on locating free debt advice services near you. It also encourages people to list out their debts clearly, which makes repayment planning easier. MoneyHelper offers tools to confirm that you are receiving all the benefits and grants available and includes a bill prioritizer to help identify which payments should take precedence. Importantly, when looking for debt solutions online, it is wise to remain cautious of quick fixes promoted through social media
Read the full article from The BBC here: Read More
Auto Amazon Links: No products found.