With the summer holiday season just around the corner, millions of Brits will be looking to book last-minute trips abroad for a well-earned break in the sun.
But while it’s great to get away, experts are now warning that the rapidly rising popularity of ‘Buy Now, Pay Later’ (BNPL) options at travel checkouts is luring holidaymakers into a dangerous debt trap.
In fact, Google searches for ‘buy now pay later holidays Klarna’ have already surged by 100% compared to this time last year.
Holly Andrews, Managing Director at KIS Finance, explains why funding a last-minute escape with BNPL could ruin more than just your summer.
“With the summer season fast approaching, the urge to book a spontaneous, last-minute sunny getaway gets more and more tempting. And thanks to the integration of ‘Buy Now, Pay Later’ (BNPL) options at checkout from airlines and accommodations, jetting off has never felt easier. However, funding an impulse holiday this way is a major financial trap that you need to avoid.
“Here are the three main reasons why using BNPL for last-minute travel is a dangerous move for your wallet:
1. Fueling impulse spending
“Social media feeds are flooded with idealised travel content, creating immense pressure to keep up.
“When you pair that emotional urge with a BNPL button, you completely remove the financial friction that usually stops us from making reckless decisions. It encourages people to book trips they simply cannot afford, based entirely on a fleeting impulse.”
2. Leads to debt stacking
“BNPL is brilliant at hiding the true cost of a purchase by breaking it down into small, seemingly harmless weekly or monthly instalments. But no one uses BNPL just once, which is why it becomes an issue.
“These micro-debts quickly pile up in the background. Before you know it, your monthly income is completely eaten away by multiple overlapping payment plans, destroying your ability to save for emergencies or cover essential living costs.”
3. Ends in a post-holiday hangover
“As a general rule, you should never use credit to fund lifestyle luxuries. If you can’t afford to pay for a spontaneous holiday upfront, you cannot afford the holiday.
“When you use BNPL, you enjoy the trip, but you return home to a massive financial hangover. You are left locked into paying for an experience that is already over, distorting your cash flow for months to come and putting you firmly on the back foot.”
“Ultimately, borrowing should be reserved for assets that build long-term security, like a home. Funding a fleeting, last-minute vacation with short-term credit is a recipe for financial anxiety. My advice is simple: if you haven’t been able to save the cash for a lavish abroad getaway, maybe look for something cheaper and closer to home.”
