Buy now, power later: 1 in 3 prioritise BNPL over other bills
Australians are letting their buy now, pay later dependency derail their finances, according to new research by Finder.
A Finder survey of 1,012 respondents – 402 of whom have a buy now, pay later (BNPL) account – revealed 1 in 3 (29%) have missed another bill in order to afford their repayments in the past 12 months.
That's equivalent to 2.4 million people who are prioritising paying their BNPL debts over other expenses.
To meet BNPL deadlines, 1 in 8 (13%) Australians have overlooked an energy bill, while 12% have gone as far as skipping a meal.
Sarah Megginson, personal finance expert at Finder, said a growing number of Aussies are living beyond their means.
"BNPL was intended to be a short-term financing option that made it more manageable to pay for bigger purchases, or to manage your cash flow, by spreading payments out over a few weeks or months.
"But these days, it can be used on everything from a cheeseburger meal to a $10 online purchase – so it's facilitating over-spending, which has become a huge strain on budgets."
Finder's research found 7% have missed a personal loan repayment to cover what they bought on BNPL, while 6% have skipped a mortgage repayment.
Insurance (5%), car loan (5%) and school fees (3%) were other bills that had been disregarded due to BNPL deadlines.
BNPL now accounts for 15% of total spending in Australia, according to data released by Worldpay.
Finder's Consumer Sentiment Tracker shows 43% of Australians have used BNPL to make a purchase in the past 6 months – with the average customer with debt carrying a balance of $867.
Gen Z is the most likely to have used BNPL in the last 6 months – with nearly 3 in 5 (57%) doing so, followed closely by gen Y (55%).
Megginson said BNPL platforms often charge hefty late fees which many people try to avoid.
"Some are prioritising their BNPL payments over other necessities such as food and accommodation costs, which may have lesser immediate consequences.
"However it's a dangerous trend as defaulting on loans could lead to a much bigger financial headache down the track."
Megginson said tighter regulations will soon require new BNPL customers to undergo credit checks and income verification.
"This will see BNPL products treated like credit, in a move to protect consumers against financial harm.
"Learning how to manage your BNPL spending habits is key. Juggling more than three payments at once can be overwhelming, so it's best to limit yourself to one at a time," Megginson said.
| Have you missed any of the following payments to pay your BNPL repayments in the past 12 months? | |
|---|---|
| Energy bill | 13% |
| Skipped a meal | 12% |
| Personal loan | 7% |
| Mortgage | 6% |
| Insurance | 5% |
| Car loan | 5% |
| Kids school fees | 3% |
| Other | 1% |
| No, I have never missed any payments to pay my BNPL repayments | 71% |
| Source: Finder survey of 402 respondents with a buy now, pay later account, May 2024 |
Methodology
- Finder's Consumer Sentiment Tracker is a monthly recurring nationally representative survey of more than 60,000 respondents.
- Figures in this release are based on a survey of 1,012 respondents, 402 with a buy now, pay later (BNPL) account, from May 2024.
- The Consumer Sentiment Tracker is owned by Finder and operated by Qualtrics, an SAP company.
- The survey has been running monthly since May 2019.
Find out how BNPL can affect your credit score.