Stricter affordability checks are now in place for Buy Now, Pay Later services in the UK, meaning shoppers could find their borrowing limits reduced or transactions blocked if they fail to meet the new requirements.
Shoppers using Buy Now, Pay Later (BNPL) services such as Klarna and Clearpay are facing tighter checks following the introduction of new regulations in July.
BNPL has long operated as a form of borrowing, allowing customers to spread the cost of purchases through instalments. However, the services were only officially brought under regulation in July, introducing greater protection for consumers and stricter checks on their ability to repay.
Under the new rules, lenders must assess whether customers can afford each transaction. Anyone who fails the relevant affordability checks may find their purchase declined.
With the expensive festive shopping season approaching, consumers who rely on these payment options could face difficulties if their accounts are restricted or borrowing limits reduced.
What has changed under the new rules?
BNPL providers, including Klarna and Clearpay, must now obtain regulatory approval to operate.
The changes give shoppers greater access to refunds and independent decisions when making complaints about their lenders.
However, the new requirements also mean providers must carry out affordability assessments for individual purchases. The checks can vary depending partly on how much a customer wants to borrow.
As a result, shoppers who previously used BNPL without difficulty may find that certain transactions are no longer approved.
Four ways to avoid being caught out
Sara Williams, a former volunteer debt adviser at Citizens Advice who shares financial guidance through Debt Camel, recommends several steps for people who find their accounts closed or their spending limits significantly reduced.
1. Slow down your spending
Before making a purchase, consider whether the item is essential or whether buying it can wait. Postponing non-essential spending can help reduce pressure on your finances.
2. Be more selective about purchases
Think carefully about what you need before shopping. For example, ordering several clothing sizes with the intention of returning some items could require a higher credit limit than necessary.
3. Review and cancel subscriptions
Regular subscription payments can gradually put pressure on household budgets. Cancelling services you no longer need may help prevent a situation where you depend on BNPL to cover the cost of earlier spending.
4. Seek help if you are borrowing for essentials
If you are using BNPL to pay for basic necessities, such as food, it may be a sign that your finances are becoming difficult to manage.
Debt charities can provide support and may also help people access food bank vouchers.
What to do if you are struggling with repayments
Anyone having difficulty keeping up with repayments on BNPL or other forms of borrowing should seek assistance as early as possible, rather than waiting for debts to become unmanageable.
The government-backed MoneyHelper website provides guidance on finding free, independent debt advice.
It also recommends writing down all outstanding debts to help establish a clear repayment plan.
Consumers can use its online tools to check whether they qualify for benefits or grants they may not be receiving. A bill-prioritising tool can also help identify which payments should be dealt with first and what steps to take after missing a payment.
MoneyHelper advises people to be cautious about debt-relief offers advertised on social media, as some supposed solutions may not be trustworthy.
Why the changes matter
The new BNPL regulations are intended to give consumers stronger protection and ensure lenders assess whether borrowing is affordable.
However, they also mean shoppers may no longer be able to rely on BNPL approval for every purchase.
For anyone already under financial pressure, the safest approach is to limit unnecessary spending, review recurring expenses and seek free debt advice before borrowing problems become more serious.
