As with credit cards, you will be charged a late fee if you miss a payment and the BNPL product will start becoming more expensive to use if the repayments are not being paid on time. You need to be very careful you use the services responsibly so that you do not take on debt that you cannot repay.īNPL products are credit products, just like any other loan, and will take regular repayments from your bank accounts or credit card. They are not required to examine your income and existing debts to determine whether you will be able to meet your repayments on the money they are lending you.ĭespite less rigorous affordability checks, BNPL can still have a lasting impact on your credit health, and even your credit report. Most BNPL providers are not bound by the same consumer protection laws as banks, which means they are not required to comply with the responsible lending obligations that apply to banks and other lenders. ![]() While these products may appear at first to be just another way to pay, it is important to realise they are really another form of credit – and like any other form of credit, you need to keep control of how much you borrow, or it can negatively impact your credit health. Regardless of what consumer protection laws are in place, following the tips set out below can help you avoid getting into too much debt and keep your credit report healthy. However, these laws won't be made until later this year, and may not come into effect for at least another year. ![]() The government announced that they will be introducing legislation that will make BNPL subject to the same consumer protection laws as banks and other lenders. The number of people using these products has soared from 400,000 in 2015 to about 2 million last year, according to data from the Australian Securities and Investments Commission. Buy Now Pay Later services like AfterPay and ZipPay are growing rapidly in Australia as many people embrace the opportunity to take home goods or pay for services, they may not immediately have the money to pay for.
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