Buy Now Pay Later, BNPL: Online shoppers who prefer to purchase through e-commerce platforms should be aware of the disadvantages related to the Buy Now Pay Later option. Looking at the figures, nearly 600 percent increase has been recorded in transactions under this facility last year.

However, experts have cautioned the users that it is very important to be careful while using the BNPL service, otherwise it can trap you in debt. Your credit report highlights your borrowing history with lenders, helping them know your responsibilities when borrowing money.

• Credit Card Affected

Lenders can see if you have paid previous debts on time or if you have missed any payments. This will help lenders decide whether to lend you money or not. If they see you have a history of missing payments, they will be less likely to accept your credit application.

Most major BNPL providers today report to credit reference agencies – companies that compile your credit report. This means that if you were to miss any Buy Now, Pay Later repayments, any future lenders will be able to see.

• Save for your goals

Saving up for large purchases may be a better option for you than Buy Now, Pay Later. By saving into an easy access account, you remove the risk of missed repayments and feel the rewards when you complete your purchase.

• Fees and interest