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Buy Now, Pay Later (BNPL) platforms like Afterpay, Zip, Klarna, and others have exploded in popularity across Australia. With the promise of instant gratification and “interest-free” instalments, it seems like a no-brainer for shoppers—especially around sales, birthdays, or big events.
But here’s the truth: BNPL is debt, and it can quickly spiral into a financial trap.
BNPL = Debt You Must Pay Back
When you choose a BNPL option at checkout, you’re not avoiding the cost—you’re simply delaying it. Each time you make a purchase with BNPL, you’re stacking up debt that needs to be repaid. While it may feel like you’re easing the burden, you’re actually increasing your total debt exposure.
If you couldn’t afford the item in the first place, stretching out the payments doesn’t make it more affordable—it just postpones the financial pain.
In fact, if you miss a payment, you may face late fees, credit score damage, and mounting financial pressure. That $100 dress or pair of shoes could end up costing far more than you expected.
The Hidden Danger: Multiple BNPL Accounts
One of the biggest risks with BNPL is how easy it is to accumulate debt across multiple platforms. You may owe $300 on Afterpay, $450 on Zip, and $200 on Klarna—all small amounts that add up fast.
Suddenly, you’re juggling repayments across several services, all due on different days, with different terms and penalties. This can be just as stressful as having multiple credit cards.
Is It Time to Consolidate?
If BNPL debt is getting out of hand, you’re not alone—and there are solutions.
Consolidating your debt into one personal loan or home loan refinance can:
- Reduce your overall repayments
- Lower your interest (if applicable)
- Help you regain control of your budget
- Stop the cycle of constant repayments
✅ Explore your options:
👉 DealingWithDebt.com.au
You may qualify for debt consolidation that simplifies your finances and helps you breathe easier. Talking to a finance broker or debt advisor could be the first step to turning your situation around.
FAQ
What are the risks of buy now, pay later?
If you pay late or miss repayments: You will usually incur late payment fees and sometimes other fees, such as collection fees. If the BNPL has not signed up to the voluntary industry code, these fees can be unlimited (not capped) so they will keep adding up. The fees charged can vary from one BNPL lender to another.
Is buy now, pay later risky?
While experts say buy now, pay later – when used carefully – can be a useful way to spread the cost of certain items, they also insist that these plans are not without risk, and customers should be aware of issues like late fees, warning that debts can “build up quite quickly”.
Can Afterpay mess with your credit?
Will using Afterpay Buy Now, Pay Later feature affect my credit score? No. Afterpay Buy now, Pay Later payments will not affect your credit score.
But too many of these will affect the decision from the credit assessor and borrowing capacity
Can Afterpay affect home loans?
They aren’t loans or credit cards in the strictest sense, but they can affect your credit rating and your chances of getting a home loan. With the above in mind, if you use these platforms, it is very important to make AfterPay and ZipPay repayments in a timely manner.
Know Your Rights
From 10 June 2025, new regulations are helping protect Australian consumers from unfair treatment by BNPL providers. If you’re having an issue with a BNPL service—such as incorrect fees, poor communication, or unauthorised charges—you have options.
Learn more here:
Buy Now Pay Later – Financial Rights Legal Centre
Who Can Help?
The Australian Financial Complaints Authority (AFCA) will begin covering BNPL complaints starting 10 June 2025. That means if you can’t resolve an issue directly with your BNPL provider, you can escalate it to AFCA for free, fair, and independent dispute resolution.
👉 Use AFCA’s Financial Firm Search Tool
📞 Or call: 1800 931 678
Please note: AFCA can only handle complaints against BNPL providers that are registered members. If your provider isn’t listed yet, AFCA won’t be able to help until they join.
What Can You Do Next?
If you’re struggling with BNPL debt:
- Review all your BNPL accounts – list how much you owe and when repayments are due.
- Talk to a debt consolidation expert – they can help you roll your BNPL debt into a single loan.
- Speak with your BNPL provider – ask for a hardship plan or payment arrangement.
- Get professional financial advice – your future self will thank you.
BNPL is a convenient tool—but it’s still borrowing money. What starts as a harmless split payment can quickly become a cycle of debt.
So before you click “Pay Later,” ask yourself:
Would I still buy this if I had to pay the full amount right now?
If the answer is no, it might be best to wait.
Need help with your debt or looking to consolidate BNPL into one simple loan?
📞 Get in touch today—help is just a call or click away.
