From Credit Cards to BNPL: How Payment Habits Are Changing in the UK

The way people in the UK pay for their shopping is undergoing a gradual transformation which people do not notice. The combination of rising costs and increased interest rates together with new payment methods at checkout has led consumers to reexamine their established payment practices. Recent retail data shows a clear move towards flexible payment solutions, especially Buy Now, Pay Later (BNPL).From Credit Cards to BNPL: How Payment Habits Are Changing in the UK amid rising costs and growing demand for flexible payments.

Rise of Buy Now, Pay Later Payments

Alternative payment methods are gaining popularity across UK retail. BNPL services now account for a growing share of transactions, not just in volume but also in value. The analysis shows that shoppers now use these options for their regular shopping needs instead of their previous pattern which limited their usage to minor expenditures. The average value of BNPL transactions has almost doubled compared to the previous year, showing that consumers are using them for bigger and more expensive items. People want to achieve short-term payment flexibility, which allows them to make partial payments instead of paying everything at once.

Credit Cards Losing Ground

At the same time, the use of credit cards is declining. Higher interest rates have made borrowing more expensive, and many shoppers are actively avoiding interest-based payments.

1. Credit card transactions now make up a smaller portion of overall retail payments

2. Debit cards continue to dominate everyday spending

3. Shoppers are becoming more cautious about long-term debt

This change suggests people are prioritising control over spending rather than relying on revolving credi

New Rules on the Way for BNPL

With BNPL usage growing rapidly, regulators are stepping in to ensure better consumer protection. From 2026, BNPL services will come under stricter financial rules.

This means:

• Clearer information about repayment terms
• Greater transparency around fees and penalties
• Stronger rights for consumers if disputes arise

Customers will also gain access to an official complaints system, offering support if something goes wrong with a payment provider.

What This Means for Consumers?

• More payment choices at checkout
• Greater use of interest-free short-term payment options
• Reduced reliance on high-interest credit cards
• Better protection and clearer rules in the near future

However, experts still advise shoppers to use BNPL responsibly and treat it as a budgeting tool — not free money.

Final Thoughts

The UK’s payment habits are evolving alongside economic pressures. As consumers become more cost-conscious, flexible payment options are filling the gap left by expensive credit. With stronger rules on the horizon, the focus is now on balancing convenience with responsibility ensuring that flexibility doesn’t turn into financial stress. From Credit Cards to BNPL: How Payment Habits Are Changing in the UK shows that shoppers are seeking flexibility and smarter ways to manage their spending.

Written by [Ketan Borada / British Portal Team] – Founder of British Portal, dedicated to providing accurate and up-to-date information on UK public services and benefits.