A CONSTANTLY increasing number of us are using services like Klarna, Laybuy, and Clearpay to pay for products in instalments over a defined length of time.

What's more, they're also interest-free.

But is it time for this 'purchase now, pay later’ industry to be more strictly controlled as it enjoys exponential growth?

More than two-fifths of customers who used purchase now, pay later services borrowed money to make repayments, according to Citizens Advice data.

While many people sought financial assistance from friends and family, others went to overdrafts, loans, and payday loans.

Furthermore, more than a fifth used their credit cards to pay off their debts.

Young adults were more likely than older ones to borrow money to pay off buy now, pay later purchases. In fact, 51% of customers aged 18 to 34 borrowed money to pay off this debt, compared to 39% of those aged 35 to 54 and 24% of those aged 55 and more.

Commenting on the findings, Dame Clare Moriarty, Chief Executive of Citizens Advice, said: “Shoppers are piling borrowing on top of borrowing, and sinking into ever more desperate situations that can feel impossible to escape from.

“The spiral of debt from buy now, pay later to credit cards, loans and even payday lenders shows it’s not a risk-free alternative. Buy now, pay later is part of the credit industry and must urgently be regulated as such.”

What does the industry say?

In response to the results, the purchase now, pay later firm Clearpay said that 90% of transactions are completed using a debit card, and 95% of instalments are paid on time.

This, it said, demonstrates that its customers “use their own money to pay for purchases and that they understand how our repayments are set up”.

Clearpay went on to insist that it has always supported the introduction of “fit for purpose” regulation for the market that “protects the customer, and that it will continue to work closely with regulators and the industry”.

“We look forward to HM Treasury’s decision on the matter,” a spokesperson added.

But despite Clearpay’s apparent support for better regulation of the market, Citizens Advice remains concerned about the impact it can have on consumers.

“What scares me most is how easily people can slip into using buy now, pay later,” said Millie Harris, a debt adviser at the charity.

The soaring popularity of buy now, pay later services and the ease at which customers are slipping into further debt as a result of using them highlights a key issue.

Many people are making financial decisions and putting themselves at financial risk without looking at the bigger picture.

Are customers who take out payday loans and rely on credit cards to make repayments even thinking about the consequences, such as what it’s doing to their credit rating and their ability to take out a mortgage?

In my view, better financial education is the key – and that’s precisely what the entire team at Future Life Wealth Management is dedicated to achieving.

It’s essential that people are able to make smarter, savvier decisions with their money, and avoid consequences that could affect them for years to come.