Australian Finance Podcast Buy Now, Panic Later- hacks to curb bad habits
4 snips
Jun 30, 2025 In this insightful discussion, Lexi Smith, a money coach at MoneyVine and former financial advisor, shares her expertise on managing personal finances without falling into debt. The conversation highlights the recent changes to Buy Now Pay Later services, emphasizing the risks involved and practical tips for responsible use. Lexi introduces a traffic light system for budgeting and countering impulse spending, while also discussing the impact of BNPL on creditworthiness. Tune in for actionable strategies to improve financial habits and relationships!
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BNPL Drives Higher Spending
- Buy Now Pay Later (BNPL) services increase both the likelihood of purchase and the total cart size.
- Consumers focus on smaller installment payments rather than the full cost, which drives higher spending compared to credit cards.
BNPL Now Regulated Like Credit
- BNPL was unregulated like other credit facilities but since June 10, 2024, it is regulated like credit cards and personal loans.
- This means assessments, credit histories, and consequences of default now apply, making it harder but safer to get BNPL.
Cycling Debt Trap Example
- Lexi coached a client who spent a quarter of their family income every week on BNPL repayments, creating an unsustainable cycle.
- The client kept borrowing more on BNPL because their income was exhausted by repayments, leading to a snowball effect.
