Despite what you may think of the service, it’s increasing in popularity. The Reserve Bank of Australia’s Payment Systems Board shows consumers spent $16 billion on BNPL during the 2021-22 financial year, up 37 per cent on last year.  

Further, a CT Group survey revealed that one in three BNPL users say the services have led them to increasing their debt to “uncomfortable levels”.  

Chartered Accountants ANZ (CA ANZ) Group Executive Advocacy, Simon Grant, is warning consumers of relying too heavily on BNPLs this Christmas.  

“ASIC’s Consumer Monitor monthly survey report for quarter one of 2022 found 19 per cent of BNPL consumers surveyed cut back or went without essentials to make repayments on time,” Mr Grant said.  

“While this payment method has allowed people to get products earlier than they otherwise would have, it has also created a financial black hole that some consumers are struggling to get out of.  

“Our message this Christmas is simple: don’t land yourself in a BNPL debt trap.  

“It may be tempting to load up your BNPL account with multiple or big purchases, but when the repayments all hit at once, week in week out, you will curse the holiday period and struggle to make ends meet.”  

Mr Grant said that Treasury is now consulting on the regulatory issues with BNPL, but providers currently have no obligation to assess a person’s ability to repay debt, so consumers need to be extra careful.  

He also warned vulnerable consumers against signing up to multiple accounts they can’t afford to repay. 

“Now there may be very good reasons to use a BNPL platform, like when you have to buy an expensive new appliance and you don’t have thousands to pay for it immediately,” he said.  

"However, everyone should do their homework and plan for the repayments. Mr Grant noted that credit cards also get a solid workout during the holiday season and warned consumers against relying too heavily on them.  

"At Christmas time it can feel like the only option is ‘credit’ at the checkout, but keep in mind that whatever you don’t pay for now, you’ll need to pay for later, often with interest – so think twice about what you put on your credit card.” 

“Do your research before taking out a credit card too, as some have attractive incentives like bonus points, but you often have to spend a certain amount before those incentives kick in.”  

“As always, if you are concerned about your debt levels and your financial capacities, please engage the services of a Chartered Accountant,” Mr Grant said.