Buy now, pay later warning

Buy now, pay later Christmas shoppers are facing a £2.3bn New Year hangover, according to new figures.

According to research by free credit report provider, Credit Karma, 26% of people used buy-now, paylater services to fund their festive shopping – running up average bills of £170.

Experts at Credit Karma say even those that borrow sensibly aren't likely see the benefit reflected on their credit score.

Unlike regulated borrowing methods, buy-now, pay-later products don’t benefittheborrower’scredit score for paying back debt within the interest free period.

This means consumers who rely more heavily on these schemes than regulated agreements might struggle to prove to financial institutions that they are responsible borrowers.