# Buy Now, Pay Later

> How Buy Now, Pay Later works, the new FCA rules that took effect in July 2026, and the protections and risks to understand before you use it.

Canonical page: [/credit-borrowing/buy-now-pay-later](/credit-borrowing/buy-now-pay-later/) · Last reviewed: 2026-08-22

Buy Now, Pay Later (BNPL) lets you spread the cost of a purchase, often interest-free. New consumer protections came into force in July 2026 as the FCA began regulating it.

## Key information

- BNPL splits a purchase into instalments, often with no interest if you pay on time
- The FCA began regulating this “deferred payment credit” from 15 July 2026
- New rules require affordability checks, clear information and support if you miss payments
- It is still borrowing — missed payments can mean charges and can affect your credit record

## How Buy Now, Pay Later works

BNPL, sometimes called deferred payment credit, lets you take goods now and pay in instalments — for example three or four payments spread over a few weeks or months. Many arrangements charge no interest provided you pay on time. It is usually offered at the checkout by providers separate from the retailer.

Because it is quick and often interest-free, it is easy to take on several arrangements at once. Each is still a credit agreement, so it is worth keeping track of what you owe across different providers.

## The new FCA rules from July 2026

From 15 July 2026 the FCA began regulating deferred payment credit provided by a third-party lender. Providers now need to be authorised (or to be operating under a temporary permissions regime) to offer it. Agreements entered into before that date remain unregulated. You can [check whether a provider is authorised](/tools-calculators/firm-checker) before you use it.

- Lenders must check that borrowing is affordable before you take out an agreement
- You must be given clear information up front, including repayment dates and any late fees
- If you miss a payment, the lender must contact you and offer support
- You can complain to the Financial Ombudsman Service if something goes wrong

## Protections and their limits

Regulation brings BNPL closer to other forms of credit, but do not assume every protection applies automatically. Whether [purchase protection such as Section 75](/credit-borrowing/section-75-and-chargeback) applies depends on how the specific agreement is structured, and an interest-free instalment plan provided directly by a retailer may sit outside these rules. Check the terms for each purchase rather than assuming they are all the same.

## Using BNPL carefully

Treat BNPL as the borrowing it is. Only commit to payments you know you can meet, keep a note of when each instalment is due, and be cautious about spreading many small purchases across several providers. Missing payments can lead to charges, [referral to debt collection](/debt-money-problems/debt-collection) and, under the new rules, may be [reported to credit reference agencies](/credit-borrowing/understanding-your-credit-score).

## Your rights

- For regulated deferred payment credit agreements taken out from 15 July 2026, you can refer an unresolved complaint to the Financial Ombudsman Service free of charge.
- Lenders must assess affordability and provide clear pre-contract information under the new rules.
- If you fall behind, the lender must contact you and treat you fairly, including offering appropriate support.

## Official sources

- [FCA — Buy Now Pay Later (for consumers)](https://www.fca.org.uk/consumers/buy-now-pay-later)
- [GOV.UK — new Buy-Now, Pay-Later rules](https://www.gov.uk/government/news/government-delivers-fairer-deal-for-shoppers-as-buy-now-pay-later-rules-come-into-force)
- [Financial Ombudsman Service](https://www.financial-ombudsman.org.uk)

## Related

- [Credit Cards](/credit-borrowing/credit-cards/)
- [Payday Loans & High-Cost Credit](/credit-borrowing/payday-and-high-cost-credit/)
- [Understanding Your Credit Score](/credit-borrowing/understanding-your-credit-score/)
- [Problems Repaying Credit](/credit-borrowing/problems-repaying-credit/)

## Sources

- FCA — [Buy Now Pay Later](https://www.fca.org.uk/consumers/buy-now-pay-later) (accessed 2026-08-22)
- FCA — [PS26/1: Regulation of Deferred Payment Credit](https://www.fca.org.uk/publications/policy-statements/ps26-1-regulation-deferred-payment-credit) (accessed 2026-08-22)
- GOV.UK — [Buy-Now, Pay-Later rules come into force](https://www.gov.uk/government/news/government-delivers-fairer-deal-for-shoppers-as-buy-now-pay-later-rules-come-into-force) (accessed 2026-08-22)