BUY now, pay later may have been tempting pre-Christmas, but the bills are now coming in and many people are finding it difficult to pay off their debts.
Young people, in particular, are among those struggling to pay back what they borrowed and, according to statistics from Australian Securities and Investments Commission (ASIC), one-in-six customers is now in financial strife.
Difficulties can include being overdrawn on their accounts, delaying making bill payments or borrwing more money to pay off their debt.
Buy now, pay later schemes are seen by many as “modern day lay-by”, but the key difference is that customers can take their goods home immediately rather than waiting until all instalments have been paid.
Lieutenant Kate Cathcart from the Bathurst Salvation Army, who often puts clients in touch with financial counsellors, is not surprised to hear young people are experiencing financial hardship, especially post-Christmas.
“I’ve heard of a number of young people who have racked up bills or whose work situations have changed and they can no longer afford what they owe,” Lt Cathcart said.
“Unfortunately I’m starting to hear it more and more.”
Lt Cathcart said she knew of one young student with a bill of more than $30,000 and little to no hope of being able to pay it off.
“Some of them get loans to try and pay it off, others have no choice but to declare bankruptcy,” she said.
Those who get loans often take long payment plans, some up to 15 years.
“So they are taking longer to pay off the debt and there is usually big interest. It means they will be broke for 15 years,” Lt Cathcart said.
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But Lt Cathcart said there was help available for people in debt trouble, including financial counselling, but her advice was simple: “If you can’t afford it don’t get it.
“At least think about it overnight. Never buy something on impulse on the day. If you still want it in a week’s time, after you’ve thought about it, and you can afford it, get it then.”