Don’t drown in Buy Now Pay Later debt this Christmas

The emergence of the BNPL market

These days, BNPL can be used for small purchases such as a pair of shoes, to a night out at the pub, to larger purchases of up to $30,000 for cosmetic surgery or solar panels for your house.



“And as the market grows, financial counsellors are seeing more clients with BNPL debt.

“84% of financial counsellors surveyed said that about half, most or all clients presented with BNPL debt now. This compared to just 31% a year ago,” says Ms Guthrie says.

And it’s a trend that has the federal government worried – this week Treasurer Josh Frydenberg announced plans to reform and tighten the rules around new digital payment systems, including BPNL and cryptocurrencies.

Other important reasons not to overcommit to BNPL

While financial regulators and credit reporting agencies have been caught a little flat-footed by BNPL, one of the three main credit reporting agencies in Australia, Equifax, recently announced that BNPL accounts and transactions will be included in credit reports from 24 July 2021.

And most (if not all) lenders pay attention to whether or not you use BNPL services when they’re assessing your home loan application.

That’s because BNPL is still a credit liability that needs to be disclosed when applying for a home loan.

So if you have any doubts about whether a BNPL purchase might affect your ability to secure a home loan – or pay off your existing one – then feel free to get in touch.

We’re all about the Christmas cheer around here, and there’s nothing more cheerful than not suffering from a BNPL financial hangover once the silly season has come to an end.

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