Be Aware of the Downside of “Buy Now, Pay Later”

National Seniors Australia has recently issued advice that consumers need to be wary of the latest “Buy Now, Pay Later” (BNPL) arrangements offered by many companies. When you use BNPL, you can buy a product and delay payment. You don’t pay interest on the purchase, rather, you’re charged fees, and they can add up quickly.

BNPL providers include:

• Afterpay
• Zip Pay
• BrightePay
• PayRight
• Openpay
• Humm (previously known as Certegy Ezi-Pay and Oxipay)
• Make It Mine

Some buy now pay later arrangements are also offered through credit card networks such as Mastercard and Visa.

While BNPL can be convenient, it can be difficult to manage repayments with other financial commitments. Australian Securities and Investment Commission research into the BNPL industry found that in order to meet repayments on time, one in five consumers:

• missed or were late paying other bills or loans
• cut back on or went without essentials such as meals.

People who may already be financially vulnerable are relying on these services the most.

If you find yourself in trouble repaying BNPL debt, contact your BNPL provider in the first instance. If you’re struggling to make repayments, you can also talk to a MoneySmart financial counsellor. They offer a free and confidential service to help you get your finances back on track. You can also call the National Debt Helpline on 1800 007 007.

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