See the true cost of Buy Now Pay Later plans. Compares BNPL interest and late fees against a standard credit card to show when BNPL saves money and when it does not.
Last updated: April 2026
BNPL plan details
Klarna: £5. Clearpay: £6 (capped at 25% of order value). Laybuy: £6.
What the same purchase would cost on a standard credit card paid over the same period.
BNPL true cost
Total cost of BNPL plan
-
-
Instalment amount -
Interest charged (if any) -
Cost if one payment missed -
Equivalent credit card cost -
BNPL saving vs credit card -
The true cost of Buy Now Pay Later
Buy Now Pay Later (BNPL) products from providers like Klarna, Clearpay, Laybuy and Paidy allow purchases to be split into instalments - typically 3 or 4 payments over 6–12 weeks. When used as intended and payments are made on time, the core instalments are genuinely interest-free, making BNPL cheaper than a credit card for short-term borrowing. The risks arise from missed payments, using BNPL for longer-term credit products, and the impact on credit files from 2023 onwards.
The missed payment trap
BNPL providers charge late payment fees when instalments are missed - typically £5–£6 per missed payment, capped at 25% of the order value for most providers. On a £50 purchase split into 3 payments of £16.67, a missed payment fee of £6 represents a 36% penalty on that instalment. For low-value purchases, fees can be disproportionately large. Some providers also report missed payments to credit reference agencies, which can affect your credit score and mortgage applications.
Longer-term BNPL credit
Some retailers offer longer BNPL products - 6 or 12 months interest-free, then reverting to a high APR (typically 39.9%) if the balance is not cleared. These products look attractive but are functionally identical to a store card or high-rate personal loan if you miss the interest-free window. The balance must be cleared entirely before the promotional period ends to avoid retroactive interest charges on the full original amount - not just the remaining balance - depending on the terms.
Frequently asked questions
From 2023, BNPL lenders in the UK are required to conduct affordability checks and report to credit reference agencies. Missed BNPL payments will therefore appear on your credit file and can affect your credit score, potentially affecting mortgage and loan applications. Making all payments on time has a neutral to slightly positive effect. Multiple BNPL applications in a short period (hard searches) can modestly reduce your score temporarily. Check your credit report if you plan to apply for a mortgage within 12–24 months.
BNPL was brought within FCA regulation following the Woolard Review in 2021, with new rules taking effect in 2023. This means BNPL providers must conduct affordability checks, provide clear information about terms, and have regulated complaints processes. Consumers have access to the Financial Ombudsman Service for disputes. The regulation has improved consumer protections but BNPL products remain higher risk than a credit card from a consumer protection standpoint - Section 75 protection does not apply to most BNPL products.
BNPL makes financial sense when: you are purchasing something you genuinely need, you have a clear plan to make all instalments, the alternative is a higher-cost credit product (like a credit card at 24%+ APR), and the purchase value is large enough that splitting the cost meaningfully improves your cash flow without risking missed payments. It makes poor financial sense when used impulsively for discretionary purchases, when you are already managing multiple BNPL plans, or when the purchase would not have been made without the availability of BNPL.