UK customers looking to ditch credit cards at Christmas, data reveals
Data from Klarna's Black Friday and Cyber Monday report has revealed that UK consumers are searching for better value alternatives to traditional credit that gives them control over their finances, such as buy now pay later (BNPL) schemes.
The report found that one in every two UK consumers is planning to ditch their credit card entirely for Christmas shopping this year, with two-thirds of credit card owners wanting to avoid paying credit card interest.
Despite credit cards promising interest-free periods, 46% of Brits that used their credit cards ended up paying interest on their Christmas shopping last year.
According to Klarna, the figures released today also show that BNPL consumers are better at planning and budgeting for their Black Friday and holiday shopping. The report revealed that 6 in 10 BNPL consumers have set an overall budget for their holiday shopping, compared with 42% of those who had never heard of BNPL.
The data also shows that half of BNPL consumers wait for Black Friday sales to make larger purchases, compared to less than a quarter of people who never heard of BNPL.
Additionally, over half of BNPL consumers research the best deals ahead of time, compared with less than a third of those who don’t use BNPL.
Alex Marsh, Head of Klarna UK, said: “This data shows that shoppers are increasingly smart and mindful about their buying decisions. It’s no wonder they are abandoning high-cost credit cards that are designed to obscure spending to drive up debt and interest payments. Helping shoppers plan in advance and budget smartly is baked into BNPL, giving people better control over their finances to save money and keep them out of debt."