In my opinion they should be banned. For the most, they target those least able to repay on time.
I worked in hire-purchase many years ago and the default rate then was astonishing.
2 Likes
Over 20 years ago, the Commonwealth Bank gave us a credit card, without any request from us! We could see that it would inevitably lead to interest payments if we were not very careful. So, we cut it up and changed to a Community Bank, with a payment card, no credit. This has worked very well for us. We maintain an accounts book and deduct every payment from the balance. With a known balance it is easy to stay within our means. Our income goes into a savings account, from which we transfer funds to the every day account as necessary.
1 Like
Was the card they gave you a Visa or Mastercard debit card? Many banks have moved away from issuing their own EFTPOS cards in favour of an off the shelf product from Visa/Mastercard. These debit cards arenât credit cards, but do offer some of the facilities offered by a credit card. Unlike a credit card, unless there is money in the bank account they are attached to, purchases canât be made. They they donât have credit facility. As a result, interest isnât accrued on purchases. They also donât have annual fees like a credit card.
Credit cards require a formal application so it would be very surprising if a credit card suddenly appeared in your letter box.
1 Like
I suspect @jblakkarly monitors more closely than the average person, but for those who may have missed it.
3 Likes
Use pay pal for some payments and subscriptionâs, enjoy the secure, handy extra wall for overseas payments.
2 Likes
That isnât a BNPL scheme though is it?
Yes you can choose a 4 payment plan as part of the checkout process.
3 Likes
I do. But I make sure to pay it off before interest becomes payable.
And I am fortunate to have a mortgage that allows me to redraw.
So I have a credit card at mortgage rates!
1 Like
Welcome @cerajane to the community.
For others who have the same opportunity are there any risks to this strategy?
Iâd wonder what happens at the end of the agreed term of the loan if is not fully paid out. For those whose home loan ends at around retiring age, having a large residual might make a big dent into the super nest egg. As a home owner is it betting against home price inflation?
Some may encourage using low cost equity based loans to avoid high interest costs for credit. Itâs not unlimited credit, and over time needs to be paid down. Otherwise is it just another credit trap, only ten to 100 times more costly than a credit card with a $1500 limit?
1 Like
I agree that for a person inclined to spend outside their ability to repay or are compulsive buyers, this could be the wrong kind of credit facility. Fortunately, having spent years working in this industry, including collections, I am well aware of downfalls that spending more than you can afford can be disasterous.
1 Like
My girlfriend bought a couple of expensive rings using a buy now pay later service called Humm (Ezi-Pay) over 24 months.
However itâs not without fees⊠none of which were pointed out to her prior to signing up e.g.
$44 to set up Humm
$8/month as a fee ($192 in total)
$6/month if you are late ($144)
$30 collection fee (not clear what kind of collection)
Sheâs well in front on her payments so she hasnât incurred any late fees.
However lately they seem to be charging additional fees for âbalancingâ the account. Itâs not clear what they are relying on.
Has anyone else had any experience with this kind of Buy Now Pay Later (BNPL) company?
3 Likes
Welcome back @MC1
I have moved your post into this already existing topic on BNPL schemes. There are a couple of topics on the site that discuss the schemes.
Zippay and Zipmoney as examples both have account keeping fees attached to accounts that extend beyond a month, most do have charges for late payments and missed payments and these can become quite substantial.
There are some references in other topics and one that particularly references your Humm one
And the external link referenced in the post:
Humm buy now, pay later â 2021 Shonky Awards | CHOICE
In reference to the collection fee a quote from the CHOICE article should help interpret that:
" Humm can happily report you to debt collection agencies (and slug you a $30 collection fee for the privilege) if you default on your account, which will affect your credit rating."
I canât find anything about balancing fees on their site but they do charge a $22 fee if you use Humm again for a large purchase and have had a previous large purchase with them (what they call Big Things purchases). They also charge a one off $2 fee for BPay payment transactions.
The $44 that was paid is the establishment fee they charge to set up a Big Things account (which can vary from $35 to $90).
Late fees are capped at 18% of the purchase price or up to $78 (which ever is lower) for Big Things purchases they say on their site.
4 Likes
I did a search on Buy Now Pay Later (and a few other keywords) prior to posting. Nothing showed up. Presumably I should have searched BNPL?
For some reason searching for Humm or Ezi-Pay/Ezi Pay also didnât return anything on the Choice website? Using Google to search the Choice website seems counter intuitive?
Thanks for moving the post to the correct topic.
4 Likes
Ahhh searches can be a bit hit and miss I find sometimes, I understand your lack of luck 
I knew there were topics, so tried a few combinations until they showed up.
I am not sure it is the âcorrect oneâ but it is one that is current and does refer to much of what you have queried and stated.
Try this search to see if it has further results that may interest you, some results will not be about the schemes:
Search results for âbuy now pay laterâ - Community (choice.community)
4 Likes
Buy Now Pay Later Theft
I have not used this BNPL system but I understand how desperate people are preyed upon and get trapped.
Why can the government not instigate a system whereby those BNPLs have no recompense from the victims who are duped or scammed by them and, are unable to repay. The story you printed being a fine example.
3 Likes
Welcome @Frances1
I have moved your post into this existing topic on BNPL schemes as it seems to fit well here.
Can you add a bit of detail of which article or post you are referring to when you mention the story in your post, and which BNPL system?
In regards to which scheme it was, do you perhaps mean all of them?
Thank you for your post and I hope you enjoy your membership of the site.
4 Likes
It is interesting, as many BNPL providers advertise their products as being âinterest freeâ. While being âinterest freeâ if you meet their conditions, they arenât free with their fees.
3 Likes
In a nut shell NO if l do not have the cash l do without, not worth being stung with the massive charges they put on slow payers, not for us at all
3 Likes
Regulation may be a few short months away.
3 Likes
Although a bit of sensationalism in this article, the BNPL industry might have to reinvent itself or crash. At the end of the day the âmoney menâ (investors, financiers) make more decisions than consumers on the life or death of companies.
3 Likes
