Buy now, pay later, in debt forever?

Sadie* leads a double life. A part-time model, she rents a spacious two-bed flat in Clapton, East London, with her best friend. She wears vintage Saint Laurent and Rick Owens, and is currently in Los Angeles visiting her boyfriend. Next month, she’s off to Paris. By all appearances, Sadie is a thriving 30-year-old woman. She’s also on Universal Credit.

Her story encapsulates the warped, trick-mirror era of financial contradiction we’re currently living in. Online, it seems like everyone’s having a great time. They live in small but perfectly formed flats in sought-after postcodes, dine at the buzziest restaurants and holiday in trendy destinations. Scroll through Insta and you’ll see outfit photos posted ad nauseam, curated from wardrobes that appear to multiply exponentially.

The news, though, tells a different story. Headlines attest to food price hikes, outrageous rents, £7 pints and a job market that’s shot to hell. April 2025 was dubbed ​“awful April” by The Guardian, owing to across-the-board bill rises on everything from energy and water to car tax and phone bills. Add to this the looming threat of a recession, as present as an encroaching fog.

“You go on Instagram and everyone is somehow living their best lives,” says Ellie, 25, who works as a journalist. ​“I often wonder how anyone is living like this unless they’re secretly minted.” That said: ​“I guess if you go on my Instagram, you’d probably think the same.”

It’s true – Ellie’s feed is filled with photos of cocktails by the beach in Madeira, techno festivals in Morocco, designer dresses and bags. But she admits that ​“I probably returned everything I’m wearing in those pictures. It’s a trap. You see these holidays and clothes and you think, well, my holidays and my clothes aren’t as nice. An insane thought to have, but your mind goes there because social media has conditioned you to want whatever you see.”

Offline, too, there is a palpable pressure to keep up. For those with even a whisper of a social life the trips, birthdays, dinners and hen do’s are incessant. ​“There’s always that pressure to chip in for stuff,” Sadie says. ​“I want my friends to have nice gifts and meals and trips. It can [feel] impossible to say no.”

Enter the hack for modern living known as buy now, pay later, aka BNPL. These short-term, interest-free loans offered by companies such as Klarna, PayPal and ClearPay have existed for years as a niche type of credit card. But the rise of e‑commerce dovetailing with the pandemic and what feels like a society-wide pressure to Consume Conspicuously has caused a rapid surge in its popularity. So much so that ​“Klarna” is now a common verb.

Approximately 60 per cent of Coachella tickets this year were purchased using BNPL, with many relying on it to also pay for accommodation and merch. (Did you even go if you don’t have a £60 hoodie to prove it?) Ellie is still paying off her £250 ticket for Primavera Sound in Barcelona in June: ​“I’m on month six of a nine-month payment plan.” Latitude Festival in Suffolk has even found a headline sponsor in Klarna itself.

Adding stuff to your cart and then using BNPL to pay for it has become second nature for many shoppers. Check out on anything from a one-week Airbnb stay to Deliveroo burritos and you’ll be tempted. Because this isn’t anything like your parents’ boring credit – BNPL is young! It’s fun! It’s chill! It’s endorsed by Paris Hilton and A$AP Rocky! But even without interest, it still means you’re living on the never-never, constantly paying in arrears for fun and experiences and meals and clothes you had last week/​month/​year.

StepChange, a leading debt charity, has long raised concerns about these methods of marketing within the financial sector. ​“Our research indicates that many young people with limited financial experience may not fully understand that BNPL is a form of credit,” says Adam Butler, the company’s public policy manager. Up until 2022, Klarna wasn’t required to report customer debts to UK scoring agencies, meaning late payments didn’t affect your credit rating. Three years ago, though, that changed, the switch-up likely the result of pressure from MPs and campaigners keen to regulate a wild west industry.

Ellie is a case in point. She first used BNPL to buy a dress on ASOS for her birthday. A year later, she was thousands in the red, using credit schemes to pay for furniture, groceries, her monthly Boots shop of loo roll and toiletries. A survey this month found that over one in 10 adults in the UK are using BNPL to cover essentials like food and petrol, with three in four admitting that they do not always think about whether they can keep up with repayments in the long term. (In the end, with no way to pay her debt back, Ellie had to ask her mum to bail her out; she is one of the very lucky few to have that financial parachute.)

Young adults make up a disproportionately large share of those seeking debt support. Last year, 33 per cent of StepChange’s clients were aged 25 to 34 – nearly double their share in the UK population, where this age group makes up just 17 per cent. But putting the entire blame on young people for their financial woes would be wrong and unfair, much like the well-worn, now-laughable myth that millennials forfeited home ownership in exchange for brunch.

Discretionary spending is hardly the main driver behind financial insecurity. One in 12 people actually turn to BNPL to cover basic costs, such as food and toiletries, as per Citizens Advice, with young people in debt and those claiming Universal Credit twice as likely to have used BNPL for essentials as the general population.

But whatever it’s used for, over-reliance on BNPL can trap users in debt cycles, especially if job losses or emergencies hit – which is what happened to Sadie, who lost her job at an animation company in November last year. Since then, she has been trying to pick up more modelling work in between ad-hoc shifts cleaning houses and applying for jobs.

​“The increasing cost of maintaining a household is making it more difficult for young people to save and build financial resilience to protect themselves from future financial shocks,” says StepChange’s Adam Butler. For the most part, buying new stuff isn’t what is making us broke. It’s food, rent, commuting costs, bills – that is, the very real, very daily cost of living, an ever-increasing price tag attached to being a person alive today.

Obviously, unnecessary spending doesn’t help. Sadie and Ellie both know they shouldn’t be splurging money they don’t have on luxuries. But, as has been the case since time immemorial, a treat is a welcome distraction from their troubling finances. As a friend once put it, ​“people can’t afford to pay rent so they buy a Labubu just to feel something”.

So: no one has any cash to actually buy things, and we all know a life on BNPL isn’t sustainable, but our social media feeds are filled with more new clothes and holidays and dinners than ever. What gives? It’s partly the ​“boom boom” aesthetic, as coined by journalist and trend forecaster Sean Monahan – who also introduced the world to ​“normcore” and 2022’s infamous ​“vibe shift” – which he describes as ​“an expression of excess”. Calling back to the opulence of the Eighties with its power suits and power lunches, forget stealth wealth – ​“boom boom” is in-your-face money à la Bezos-Sánchez – actual billionaires who can actually afford it.

To Monahan, this contradiction makes sense. ​“It may seem odd, but in times of economic insecurity, we often see very decadent aesthetics take hold,” the Los Angeles-based theorist tells us. ​“There’s something a bit protective about embracing hedonism and consumerism. In some ways, [it’s like] you’re saying the bad economy isn’t affecting you.”

There is also, he adds, a cognitive dissonance when it comes to social media. ​“When you look at the world through that lens, it does seem as if everyone is happy and fit and attractive and rich – they don’t seem to work, but they have lots of clothing and luxury goods. But influencers are selling you an entertainment product… they’re selling an illusion.”

Sometimes, conspicuous consumerism isn’t the cause of financial instability – it’s a symptom. Take the lipstick effect, a theory which suggests that sales of lipstick increase in times of economic hardship because consumers, unable to afford big-ticket items, turn to little luxuries for a morale boost. It happened during the Great Depression in the 1930s and again after the 2008 crash. The same logic applies: you could die before you ever get on the property ladder, so why not go out to dinner (or buy that Labubu)? Similarly, student loan debt seems infinitely more manageable (or at least further away) when you’re under the sun in Marseille.

More than any lofty philosophy, though, Monahan suggests that so-called ​“Klarnamaxxing” – a light-hearted term with serious connotations used by his friendship group – is the result of something more ordinary and, frankly, relatable: an abundance of choice paired with a lack of financial literacy. As we all know, not paying now ain’t difficult: there will likely be a few BNPL schemes to choose from when you go to check out.

“[We’ve ended] up in a situation where people have choices and are maybe not making the best decisions,” he says. ​“I don’t know if it’s nihilistic so much as the simple fact of humans not being great at managing their finances.”

The fact is, secure and lifelong employment is out of reach for many young people, which has caused a drastic shift in the way they approach their careers and finances. Then there’s the age-old crux of consumerism: the silent belief that if we acquire new and better things, we can make ourselves better – make ourselves whole. It’s a crushing disappointment when that feeling wears off the instant a package arrives on Sadie’s doorstep, replaced by a scorching sense of shame that kicks into overdrive whenever she opens the Klarna app. ​“You see the money there and suddenly you realise: I really didn’t need these shoes.”

For Ellie, figuring out how to pay her debt back (before her mum stepped in) opened up a well of anxiety. ​“I felt very burdened by it,” she says. ​“I’d be alone and constantly checking my credit balance, thinking: ​‘How am I going to make a dent in this?’ It made me miserable.” The balance hung like an albatross around her neck, which was already bearing the heavy weight of student loan repayments.

At least the guilt that typically accompanies conversations about money is finally being spoken and written about. Lifestyle creep, doom spending, soft saving – every day, our cultural lexicon expands to accommodate this new financial candour, even if they can contribute to memeifying very real, scary issues. Let’s keep talking in serious terms, then – girl math jokes aren’t going to change anything.

*Names have been changed