An estimated 7.7 million Brits have “significant” outstanding balances with buy-now, pay-later companies, with the average customer racking up debt of £538, according to money platform Credit Karma.

The number of customers using these credit schemes is estimated to have grown by 1.6 million in 2021, taking the total number of active UK customers to 11.6 million.

Buy now, pay later allows shoppers to split their purchases into monthly payments. There’s usually no interest or fees unless you miss a payment.

Big names in the industry include Klarna and Laybuy.

Campaigners have called for the sector to be regulated with Citizens Advice saying they can be a “slippery slope into debt” as they encourage people to spend more than they can afford.

Credit Karma said Britons have in total spent £5.79bn via buy now, pay later, with £4.12bn of this still outstanding to pay.

Those falling behind are experiencing more than just debt. Nearly a third (31 per cent) say they have seen their credit score drop as a result, while a similar number believe that they have been rejected for a mortgage or other borrowing after missing repayments.

Ziad El Baba, general manager at Credit Karma, said: “Buy now, pay later services can be a great tool for people who wish to make a purchase and break up their payments into smaller, more manageable amounts.

“However, borrowers must be cautious about how much debt they take on via buy now, pay later and make sure they’re able to follow through with the terms of the arrangement. This is especially important since missing a payment can have a negative impact on your credit score, which can make borrowing more costly for consumers down the line.”

Responding to the findings, Gareth Shaw, head of money at Which?, said: “Our research shows that shoppers are being bombarded with buy now, pay later schemes at the biggest retailers, often with no information or warnings about the risks of late fees or getting into debt, so it’s very concerning to see such a huge amount of debt related to these schemes.

“This demonstrates why there should be no further delay to plans for buy now, pay later regulation, which should include much greater marketing transparency, information about the risks of missed payments and credit checks before consumers are cleared to use buy now, pay later providers.”