Credit Unions Here to Support Individuals with Financial Struggles: ABCUL CEO Speaks to BBC Money Box

Friday 26 January 2024

On Saturday 27 May, ABCUL CEO, Robert Kelly spoke to the BBC Money Box team about the vital role credit unions play if an individual finds themselves in difficulty after using Buy Now Pay Later (BNPL) schemes.

Robert clarified that BNPL can be used effectively by many individuals, but repayments often become unmanageable when multiple BNPL commitments are used at the same time. This currently unregulated form of credit is often misunderstood by consumers when they enter into the agreement.

The segment included a case study from a 19-year-old woman who experienced significant affordability issues after she entered into five BNPL agreements totalling nearly £400 when purchasing items needed to start her university degree. The young woman originally believed this to be an affordable course of action due to her student loan, but soon found herself struggling with debt as the cost-of-living pressures saw her budget become unsustainable.

The student urged anybody facing financial difficulties after using BNPL schemes to reach out to their local credit union and build a healthy savings habit to give have a buffer in times of unexpected financial difficulty.

ABCUL CEO raised that BNPL services should be used with appropriate caution during the cost-of-living crisis and inflation increases, where the pressure on income and expenditure is unpredictable.

Listen to the full interview here.