Buy Now, Pay Later: What the New Rules Mean for You

From 15 July 2026, Buy Now, Pay Later (BNPL) services such as Klarna, Clearpay and PayPal Pay in 3 are now regulated by the Financial Conduct Authority (FCA).

For millions of people across the UK, this is good news. The new rules give shoppers greater protection and help ensure that borrowing remains affordable and transparent.

At Boom Community Bank, we believe borrowing should help improve your financial wellbeing—not create unnecessary stress. Here's what has changed and what you should consider before choosing any type of credit.

What is Buy Now, Pay Later?

Buy Now, Pay Later allows you to spread the cost of a purchase over several instalments, often interest-free, making it an attractive option when shopping online or in-store.

When used responsibly, it can be a useful budgeting tool. However, it is important to remember that BNPL is still a form of borrowing.

If you miss payments or take out several BNPL agreements at the same time, it can quickly become difficult to keep track of what you owe.

What's changed?

The Government has introduced new rules to give BNPL customers similar protections to those using other regulated credit products.

The biggest changes include:

• Affordability checks before credit is approved.

• Clearer information about how BNPL works and what happens if payments are missed.

• Access to the Financial Ombudsman Service if something goes wrong.

• Better protection if you experience financial difficulty, with greater signposting to debt advice before debt collection action.

• Stronger rights when purchasing faulty goods, bringing BNPL more in line with credit cards and other regulated lending.

These changes are designed to ensure people understand the commitment they are making before borrowing.

Why does this matter?

Over recent years, BNPL has become incredibly popular because it is quick, convenient and often interest-free.

However, research has shown that many people hold several BNPL agreements at once, making it easy to lose track of repayments. Some shoppers also didn't realise they were taking on debt because BNPL was presented as simply another checkout option.

The new regulations aim to reduce these risks while allowing people to continue using BNPL where it is appropriate.

Before you choose Buy Now, Pay Later

Before selecting BNPL at checkout, ask yourself:

• Can I comfortably afford the repayments?

• Do I already have other BNPL agreements running?

• Would I still be able to make these payments if my circumstances changed?

• Am I buying something I genuinely need, or making an impulse purchase?

Taking a few moments to consider these questions can help prevent financial pressure later.

Could a personal loan be a better option?

BNPL works well for some short-term purchases, but it isn't always the most suitable choice.

If you're planning a larger purchase or need to borrow for a specific purpose, a personal loan can offer:

• Fixed monthly repayments

• A clear repayment schedule

• One manageable payment instead of several different agreements

• Regulated lending with clear terms from the outset

At Boom Community Bank, we carry out affordability checks to make sure borrowing remains manageable and responsible. As a community lender, our focus is on supporting members, not encouraging unnecessary debt.

Borrow with confidence

The new BNPL regulations are a positive step for consumers, providing stronger protections and greater transparency.

Whatever type of borrowing you choose, it's always worth taking a moment to understand how it works, what it will cost, and whether it fits comfortably within your budget.

If you're considering borrowing and would like to explore alternatives, Boom Community Bank offers fair, affordable loans designed to support your financial wellbeing. Our friendly team is here to help you understand your options and make an informed decision.

Need to borrow responsibly?

Visit www.boomcb.org.uk to explore our range of affordable loans and discover how community finance can help you achieve your goals without compromising your financial wellbeing.