Buying now is easy. Paying for purchases later can be a lot harder, and a new report shows 'buy now, pay later' services (BNPL) are leading some Australians into financial trouble.
BNPL refers to the growing numbers of services - or digital platforms, that let you make an on-the-spot-purchase, take the item home and pay for it later.
I'm talking about the likes of Afterpay, Openpay and a whole host of other 'deferred payment' providers. Unlike credit cards, interest isn't usually charged on BNPL accounts. Instead, fees can apply if you fall behind with payments.
Perhaps the bigger problem is that BNPL services make it easy to overspend.
New research by RateCity shows that one in three Australians have used BNPL, but it's especially popular among 18-34-year-olds, half of whom have used Afterpay, zipPay or similar.
Almost a third of people who've used BNPL have found themselves in money troubles. This includes 16 per cent of people who've overstretched their budget, leaving them struggling to pay for other expenses.
More than half of those surveyed (53 per cent) said BNPL platforms caused them to impulse buy - a figure that rises to seven out of 10 Australians aged 18-34.
Given the potential downsides, it's important to approach BNPL with care.
If you plan to use BNPL, aim to stick with just one provider, and set strict spending limits.
Make a habit of taking a breather before you go ahead with a purchase.
If you're applying for a home loan, take extra care. Heavy use of BNPL can see a bank reduce the amount they will lend to you.
It could be the difference between achieving a life-changing goal like buying your first home, or being left with a whole load of here-today-gone-tomorrow purchases that you never really needed.