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Aussies take to new format
Buy now, pay later popular DALLAS SHERRINGHAM HE Buy Now Pay Later has become the new purchasing phenomenon in Australia and is proving to be a good method of managing debt for families and small business. We all have a major problem with overspending at Christmas with 24% of Aussies going into debt and borrowing money in the festive season, with an average debt of $570 each. Splashing out on the credit card is so easy in December, but when the bills start coming in early in the New Year, it could take 12 months or more of careful budgeting to pay it all off. One way many Aussies are looking to ease the burden of debt is by using the Buy Now, Pay Later (BNPL) services. With the rising popularity of BNPL services like Afterpay, Zip and Klarna, a survey by Reviews.org found 43% of Aussies have used a BNPL service before and 25% currently have an outstanding balance. The most popular format is the “four easy payments” method which ensures consumers pay their debt promptly without incurring interest charges. The report was written by Reviews.org Digital Content Editor Kate Reynolds.
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Here are some key findings from the report: • The main reasons Aussies use these services are that they did not have enough money to cover the full amount upfront, it’s easier to budget small payments and they wanted to take advantage of a timely sale. • The average largest purchase made with BNPL services is $466.74. • One four in 4 Aussies currently have an outstanding balance on a BNPL purchase. • The average outstanding balance is $391.56. • 30% use them rarely (once or twice a year), 43% use them monthly and 12% use them weekly. • More than a quarter at 27% have paid a late fee with BNPL services. • 45% of those who use BNPL services are between 16 and 34-yearsold. Ms Reynolds also found that when it comes to why we want to use BNPL services, the answers are varied. “While BNPL providers don’t charge interest like credit cards do, they do charge fees, and these can add up if you miss payments. “However, we found that users look at BNPL providers favorably, with 86% surveyed saying they plan to continue using BNPL services, and 86% saying they would recommend using them.” • Only 5% thought that BNPL services were predatory or greedy. • 18% say they did not have enough
money at the time to cover the full amount. • 16% say it’s easier to budget smaller payments. • 15% say they wanted to take advantage of a good timely sale. “Despite an overwhelmingly favorable outlook from BNPL users, government website Money Smart says there are a number of things to keep in mind when using BNPL services,” Mr Reynolds said.
“Watch your spending: it’s easy to overspend on things you can’t afford when you’re not paying for them upfront.” “It can be unmanageable: with so many BNPL services, if you sign up to several, it can be much harder to keep track of your payments, which could result in late payment fees.” The full report is available on Reviews.org
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MARCH 2022
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