Concerns have been raised about shoppers in the UK sinking into a debt spiral as more customers are borrowing money to make buy now pay later (BNPL) payments.
Figures from charity Citizens Advice showed some 42% recent BNPL shoppers relied on credit cards or other forms of borrowing to pay off what they owed.
Some of the other forms of borrowing shoppers used included bank overdrafts, borrowing from friends or family, a personal loan, a payday loan or a guarantor loan.
Younger shoppers are especially vulnerable to overstretching their funds as 51% of 18- to 34-year-olds have borrowed to pay off BNPL purchases, according to the data.
BNPL agreements allow consumers to spread out payments for goods in equal instalments with no interest or charges. But some firms impose late payment fees if shoppers fail to pay it back on time.
The biggest providers include Klarna, Clearpay, Laybuy and Zilch, and each have their own repayment and fee structure, with costs typically split into weekly, fortnightly or monthly instalments.
PayPal (PYPL) also has a pay in three agreements that allows users to split the cost of their purchase into three equal payments, paid over three consecutive months.
Millie Harris, a debt adviser at Citizens Advice in East Devon, said: "Most of the people I speak to who are using buy now pay later live off overdrafts and credit cards, so are using these for repayments. It is just relying on one debt to pay off another debt.
"What scares me most is how easily people can slip into using it. They come to rely on it much more quickly than other forms of credit. It's just a few clicks at a checkout. Too often that means people don't realise how serious it is — that it is credit and there are consequences if they don't repay it."
Citizens Advice surveyed 2,288 people who had used BNPL in the last 12 months.
The convenience of BNPL has spurred rapid growth in the sector over the past couple of years and it is estimated that more than 17 million people in the UK have used it.
However, analysts have warned that the "escalating cost of living crisis risks people turning to BNPL schemes to help tide them over".
"BNPL schemes can be a particular banana skin for those embroiled in debt. Many BNPL services don’t subject customers to a 'hard' credit check that can leave a footprint on their credit report," said Myron Jobson, senior personal finance analyst at interactive investor.
"As such, a key issue with BNPL is it may attract people who are already in the red and may be struggling to pay existing bills."
On Monday, Apple (AAPL) announced it is launching its own BNPL service in the United States as part of the next iOS 16 software update, and will be available anywhere that accepts Apple Pay, both online and in stores.
Apple Pay Later will allow iPhone users to spread the cost of purchases over four to six weeks without paying fees or interest. There is no confirmation on whether the service will be launched in the UK.
Although the industry is currently unregulated, the Treasury plans to change the law to bring some forms of BNPL products under the umbrella of the Financial Conduct Authority (FCA).
Several BNPL providers such as Klarna have recently announced that they would report the use of products to UK credit reference agencies from June, which could affect consumers' credit score.
The move could either help or hinder users' ability to take out other financial products like mortgages.