man selecting shopping car on screen

Buy now, pay later?

Buy now, pay later?

See it, want it, buy it…then pay for it later, what could be easier?  Buy now, pay later (BNPL) is an increasingly popular in-store or online payment option in New Zealand, but is it right for you? We take a look at what BNPL is, how it works, along with the advantages and drawbacks of this short-term loan option.

What is BNPL?

Buy now, pay later (BNPL) is a service that allows you to get the product or service you want straight away, then pay for it in installments over a period of time. Popular BNPL providers include Afterpay, Laybuy or ZIP.

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How does BNPL work?

BNPL providers are fully integrated on the checkout page of an online store. You just opt to pay via the BNPL provider instead of using your credit card. Once you’ve created an account, approvals are processed shortly after your details have been submitted. You don’t have to use this service exclusively online either, BNPL is available in-store at many retailers throughout New Zealand.

Some BNPL providers will run a credit check and you may not be approved if you have a poor credit rating.

You may be requested to make an initial payment upfront, then the rest of your payments will automatically come out of your nominated bank account, debit card or credit card. Repayments are usually spread over five or six weekly or fortnightly payments.

lady in mall with shopping bags

Advantages of BNPL

  • It’s convenient
  • Fast and easy set up and approval process
  • Interest free terms
  • No fees if you make your payments on time


Drawbacks of BNPL

  • It can encourage impulse spending
  • Easy to overspend and blow your budget
  • High late payment fees if you miss a payment or don’t have enough money in your bank account
  • It can affect your ability to get a loan
  • You can run into trouble if you are juggling too many payment plans at once

man thinking with question marks over his head

So, is BNPL the right fit for you?

Deciding whether to use a BNPL service is a personal choice based on your financial situation. Before you jump right in it’s a good idea to ask yourself – Do I need it, or just want it? Can I comfortably afford the weekly or fortnightly repayments? If the answer is yes, then using BNPL can be a good way to make purchases and spread the payments over a short period of time. However, if you know you don’t have the best spending habits and think you’ll have difficulty making repayments, BNPL could make your situation go from bad to worse. Choose wisely!

You may be aware the New Zealand government is introducing new protections for consumers using BNPL, find out more here.

Feeling financial pressure?

If you have a loan with Oxford Finance and are experiencing an unforeseen change in your financial situation, don’t leave it too late to contact us or call 0800 88 44 66.

Get confidential financial mentoring or budgeting advice from Money Talks, an organization that offers advice at no cost to you. Call them on 0800 345 123 or visit their website here.