Global retail bank Klarna has released new research on the personal finance habits of UK consumers.
In particular, the report highlights the anxiety consumers have in regards to credit card borrowing. Customers of buy now pay later schemes are least likely to miss a payment, whereas 16 percent of those using a traditional credit card admitted that they had missed a payment before.
The report also found that the highest source of debt is from credit cards, at 50 percent. Borrowing from a high street bank comes in at 25 percent, and taking out a payday loan at 23 percent.
The research also reported women as being less likely to be in debt, with 53 percent confirming that they’d never been in debt, compared to only 46 percent of men. Gen Z are also less likely to be in debt at 52 percent, compared to Gen X. This may be due to the fact that they are less likely to use credit cards.
“It’s reassuring to see that consumers are becoming ever more aware of the reality of credit card borrowing. For too long people have assumed that credit cards are the safe option because they are associated with well-established household names, when in fact they exist purely to profit from consumer misery, pushing sky-high credit limits and charging extortionate interest rates and fees that trap them into long term debt,” said head of Klarna UK, Alex Marsh.
The Klarna report also found that 68 percent of buy now, pay later users agreed that the service has helped them to manage their spending better during the holiday season.