Buy Now, Pay Later services have become a familiar sight at online checkouts. They allow shoppers to receive an item immediately and divide the cost into several payments, often without paying interest.
While this can make purchases feel more manageable, Buy Now, Pay Later is still a form of borrowing. Missing payments or managing several plans at once can quickly place pressure on your monthly budget.
From 15 July 2026, many Buy Now, Pay Later lenders in the UK are regulated by the Financial Conduct Authority (FCA). Here is what the changes could mean for you.
What is Buy Now, Pay Later?
Buy Now, Pay Later, sometimes called deferred payment credit, allows you to spread the cost of a purchase over a short period.
For example, instead of paying £120 upfront, you might make four payments of £30.
Although these arrangements are commonly interest-free, you are entering into a credit agreement and agreeing to make every payment on time.
What has changed?
Under the new rules, third-party Buy Now, Pay Later lenders must be authorised by the FCA to continue offering these services.
The rules are designed to give customers protections similar to those available with other regulated forms of credit.
1. Lenders must consider affordability
Before approving a new agreement, lenders are expected to assess whether the customer can afford the repayments.
This could mean that some applications are declined. While being rejected may feel frustrating, the purpose of the check is to reduce the risk of people taking on repayments they cannot comfortably manage.
2. Customers must receive clearer information
Providers must give customers information that helps them understand:
- How and when payments will be collected
- Their responsibilities under the agreement
- The potential consequences of missed payments
- Their rights and available protections
This should make it easier to understand the commitment before agreeing to a payment plan.
3. Greater protection when something goes wrong
Qualifying purchases may now receive stronger protections, including Section 75 protection in certain circumstances.
Section 75 can allow you to claim from the lender when goods costing between £100 and £30,000 are faulty, not delivered or misrepresented. Whether you are covered will depend on the details of the purchase and agreement.
4. Complaints can be taken further
If you experience a problem, you should first complain directly to the provider.
For eligible issues involving regulated agreements entered into from 15 July 2026, you may be able to refer an unresolved complaint to the Financial Ombudsman Service. This is a free and independent service.
Does this mean Buy Now, Pay Later is safer?
The new protections are an important improvement, but they do not remove the financial risks.
Splitting a purchase into smaller amounts can make it appear more affordable than it really is. Problems can arise when several plans overlap and payments begin leaving your account on different dates.
Before using Buy Now, Pay Later, ask yourself:
- Could I afford this purchase without borrowing?
- Will I still manage the payments if an unexpected bill arrives?
- Do I already have other payment plans?
- Have I included every instalment in my monthly budget?
If the repayments would leave little room for essentials, it may be better to delay the purchase.
What if you are struggling with existing payments?
Do not ignore the situation or use another credit product to cover a payment without first considering the longer-term effect.
Contact the provider as early as possible and explain that you are experiencing financial difficulty. Regulated lenders are expected to provide appropriate support to customers who are struggling.
It can also help to:
- List all your current balances and payment dates
- Cancel unnecessary subscriptions and non-essential spending
- Prioritise essential household bills
- Avoid opening additional payment plans
- Seek debt advice before missed payments accumulate
The bottom line
Buy Now, Pay Later can be convenient, but convenience should not hide the fact that it is borrowing.
The new rules give UK shoppers clearer information, affordability checks and improved routes for resolving problems. However, the safest approach is still to check the full cost, understand every payment date and make sure the repayments genuinely fit your budget.
If several payments and debts are becoming difficult to manage, Revolution Money can help you understand your financial situation and explore the options that may be available to you.
Debt solutions may not be suitable in all circumstances. Fees may apply, and your credit rating may be affected. Seeking debt advice will not affect your credit rating.