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‘Recipe for disaster’: Buy now, pay later schemes causing massive debt

Millsy & Karl
Article image for ‘Recipe for disaster’: Buy now, pay later schemes causing massive debt

Consumers are racking up huge debts at an astonishing rate using buy now, pay later schemes according to Financial Counselling Australia.

The schemes allows people access to good and services without paying anything up front, and instead paying it off over a series of instalments.

“We’re seeing more and more people who have got more and more buy now, pay later debt,” Fiona Guthrie CEO of Financial Counselling Australia said on 6PR Breakfast.

“We are really concerned in particular that lots of people … are using them for essential expenditure such as food and medication and utility bills.

“And when you’re using a credit product for essential day-to-day living expenses it’s a recipe for disaster.

“We’ve seen people with multiple buy now, pay later accounts and payments, it makes it really hard to manage your money.

“So that’s why we’re so concerned that the industry sits outside an adequate consumer credit protection framework.”

Press PLAY to hear the full interview below 

Image: iStock by Getty

Millsy & Karl
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