Sydney, Dec 14: Research conducted by Credit Savvy has found that more than half of those surveyed intend to use Buy Now, Pay Later (BNPL) schemes during the festive season.
A poll of 6,500 Australians surveyed by online credit score provider revealed that the respondents indicated an intention to use these increasingly popular, short-term finance providers to cover their expenses in the lead-up to Christmas.
The research also showed that a whopping 76 per cent of those surveyed had used BNPL in the past 12 months.
BNPL schemes enable purchasers to immediately receive goods and services while paying off the purchase price in interest-free installments.
Fees do apply for late or missed payments.
Among the key players in the booming industry are Afterpay, Zip Pay, Klarna, Humm and Bundll.
“Our recent Credit Savvy survey found that two of the top reasons for using BNPL were for convenience and budgeting,” Managing Director of Credit Savvy Paul Nicolo said.
“Although the BNPL form of payment is widely promoted as ‘interest-free’ there may be costs associated with account management, late fees and other charges which can add up quickly.
“BNPL could also affect your credit score if the provider performs a credit check when you sign up, or if you miss your payments.
“So despite the convenience, it may not be the right option for those looking to build a good credit report.”
Other key findings from the Credit Savvy survey revealed:
General Use
· 33 percent of people have used BNPL more than ten times in the past 12 months.
· 43 per cent of those surveyed cited BNPL as “a way to budget.”
· The most popular purchase category is clothing and footwear, with 65 per cent of respondents using BNPL providers for these items.
· The second most popular category is personal technology (38 per cent of those surveyed).
· 58 percent of BNPL purchases are for $2,500 or less.
· Three percent of purchases are for $10,000 or more.
Christmas Spending
· 77 per cent of those surveyed claimed that BNPL would be the only form of credit they would use this festive season.
· 55 percent of respondents intend to use BNPL for festive purchases, with 21 per cent intending to use the service for essential groceries.
Fees and Charges
· 71 per cent of respondents have not had late fees or charges imposed.
· 29 per cent have received late fees or charges, of which 77 percent were $55 or less, while only four percent were $200 or more.
To find out your credit score for free and see what’s on your credit file, head on to creditsavvy.com.au.
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