July 22nd 2024.
Financial counsellors are expressing the need for urgent changes in the way Buy Now Pay Later providers operate, as more and more individuals are turning to these services for their essential needs. According to new data from finance marketplace Compare Club, a significant 30% of Australians are utilizing these services to cover expenses such as groceries, fuel, and medical costs. What's even more concerning is that some people are finding ways to bypass the system by using Buy Now Pay Later to purchase gift cards.
Kate Browne, head of research at Compare Club, shared, "Australians are revealing that these services play a crucial role in their financial management and survival. They are now using them to pay for essential products." It has also come to light that several Buy Now Pay Later services allow users to purchase gift cards, which can then be used either online or in-store to buy necessary items like food or fuel. This is a concerning trend that needs to be addressed.
In fact, the issue hits close to home for Nicholas Wiganda, a full-time student who relies on Buy Now Pay Later services after being rejected for a credit card. Despite working part-time, Wiganda makes sure to stay on top of his repayments. He shared, "I would say I'm pretty typical for someone my age, a bit more on the spendy side. I tend to buy quite a bit of stuff, and I can be quite impulsive." For Wiganda, Buy Now Pay Later has become a practical substitute for a credit card, especially since he finds it challenging to obtain one. He added, "I've never heard of anyone being declined for it."
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