More than 44 % of shoppers fear they will be unable to pay off Christmas debts without borrowing even more money, a survey has found.
The average amount spent by Buy Now Pay Later (BNPL) customers during Christmas 2020 was £211, slightly up from £201 in 2019, comparethemarket.com found.
The highest average spend was by those aged 45 to 54, at £277.
More than two-fifths (44%) of UK adults who used a BNPL scheme to fund their Christmas shopping are now concerned about their ability to repay, the research concluded.
Concerns have been mounting about some consumers taking on unsustainable debts. Labour’s Stella Creasy has urged ministers to regulate BNPL lenders , warning of a “financial scandal waiting to happen”.
But it has also been argued that, when used responsibly, such schemes can help prevent people turning to higher-cost forms of credit to finance purchases.
Comparethemarket.com found 36% of BNPL users saw it as a way to spread the cost of Christmas over a longer period.
However, the findings also suggest that schemes may encourage unnecessary spending, as nearly a third (32%) felt it made them spend more than they usually would and more than two-fifths (44%) bought more extravagant gifts.
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James Padmore, head of money, comparethemarket.com said: “When used responsibly, buy now, pay later schemes can be an effective and alternative way to spread out the payments of large purchases.
“It’s easy to see why it’s popular at a time like Christmas when people may be spending larger sums than usual.
“However, the ‘I’ll deal with it later’ attitude to using this type of financing may mean that some people are now really feeling the strain.
“Our findings show that this has unfortunately caught up with some customers, who are now having to take on more debt to cover the cost of their Christmas spending.” More than 2,000 people were surveyed across the UK in January.