Gen-Z warned about credit score risks, as Brits turn to BNPL schemes to book holidays

• BNPL interest in the UK surged by 77% in the past three months, reaching all-time high levels

• Reports indicate that Gen-Z are most likely to finance holidays via BNPL

• Updraft explains the risks involved and how to avoid negative financial implications when booking holidays this January.

The combination of the cold temperatures across the UK with the enticement of travel deals means that January is a prime time for Brits to book holidays.

Simultaneously, new data suggests that travel paid for via buy now, pay later (BNPL) schemes may see peak rates in January 2026 – especially amongst Gen-Z. Although this type of payment plan can make holiday dreams a reality, there are associated risks.

Aseem Munshi, Our founder at Updraft, explains the dangers of buy now pay later (BNPL) schemes when booking a holiday, and the key steps to protect yourself financially.

Gen-Z are most likely to book holidays via BNPL as UK usage spikes

As many airlines offer low or no-deposit bookings with the condition that the remaining balance is paid at a later date, data suggests that more holidays than ever will be paid for via BNPL this month.

Updraft’s analysis of Google search data has uncovered that UK searches for ‘BNPL’ have increased by 75% in the past three months – reaching an all-time high.

This, combined with research that found one in ten[1] Brits used credit cards or buy now pay later schemes to pay for their summer holiday, suggests that BNPL use for holidays this January will also reach peak levels.

What’s more, Gen Z (ages 18-24) were found to be most likely to fund their holiday through borrowing via BNPL. This highlights how BNPL schemes have become a go-to solution for younger generations, perhaps with some consequences that consumers may not be aware of.

Commenting on the potential risks, Aseem Munshi explains:

“While BNPL schemes are becoming increasingly appealing to consumers, these schemes raise the financial stakes of your bookings, especially with spread payments. Although it may seem to ease the pressure of paying at the point of booking, inflation and everyday costs can stretch your budget in unexpected ways. This means you may not be able to make future payments.”

“Missing just one payment can damage your credit score. For many Gen Zers who are new to managing credit, this could be one of the first significant hits to their credit score, making it harder for them to access credit in the future. “

Using credit to finance your holidays in 2026

For individuals or families looking to enjoy current airline sales and lock in early deals, using a credit card can provide an added layer of protection. However, it may raise the stakes for Gen Z.

Aseem explains:

“Under Section 75 of the UK Consumer Credit Act[2], payments of over £100, but under £30,000, are protected, with the card issuer sharing liability. This means that if anything goes wrong – the travel company goes bust or the trip is cancelled – customers can claim their money back.”

“This adds a level of security that is particularly important when booking trips in advance, or during sales, where significant discounts influence financial decisions.”

“However, it may only heighten the risk for Gen Z, who may have less financial experience. It’s important to be aware of how debt can accumulate, leading to missed payments, interest charges, and damage to their credit score.”

“Make sure to pay off the balance each month in full and keep track of spending. Responsible credit card use helps to build a positive history, making it easier to access loans or credit in the future. “

How to consciously book and pay for 2026 travel plans

Aseem concludes:

“Approach holiday booking and payment processes with mindfulness to avoid financial strain later down the line.”

“If possible, aim to save for your travel plans in advance, rather than relying on credit or BNPL schemes. Using methods such as the 50-30-20 method to split up monthly income – 50% on monthly essentials, 30% on flexible wants, and 20% on savings and debt – can help to save for those dream holidays.”