Young people don't see buy-now-pay-later as real debt, research finds
Young adults don't see buy-now-pay-later as debt, and half believe it carries fewer risks than other borrowing.
Buy-now-pay-later services like Afterpay, Klarna and Zip market themselves as payment tools, not debt. Young people are buying the message.
Recent research surveyed young adults. Four in ten did not consider the products actual debt.
Nearly half thought buy-now-pay-later carried fewer consequences than other forms of borrowing. These services offer fast approval and easy checkout.
They can encourage overspending. Missed payments attract late fees.
Debt can mount quickly. A 2024 review of New Zealand reforms found that bringing buy-now-pay-later under consumer credit law has not yet reduced financial harm.
Providers charge vendors a small percentage per sale. But they earn substantial revenue from late fees charged to consumers.
- 4 in 10
- Young adults not seeing it as debt
- 4 fortnightly instalments
- Standard repayment period
- 2% to 8% per sale
- Vendor commission range
- September 2024
- Regulatory change date
Why it mattersIf young people don't recognise buy-now-pay-later as debt, they may borrow more than they can afford and face unexpected financial trouble.
AustraliaAfterpay and other buy-now-pay-later services are widely used by Australians; stronger protections and better financial education may help younger users avoid debt traps.
✓ Claims checked against the source. checked 9 d ago
