‘Buy now, pay later’ schemes bury Aussies in debt: ‘Before I knew it, I was drowning’
- Replies 10
We all know about buy now, pay later (BNPL) services. They're everywhere nowadays — on the internet, at grocery and department stores, even at some petrol stations.
It's a service that many Aussies, particularly those with less than perfect credit and unable to secure a loan, have come to rely on, especially in this economy when things have improved a bit but are still… not great.
However, while BNPL gives those with credit troubles a bit of leeway to shop, it can also have devastating effects if used excessively.
Just ask Jacqueline Liddell, a 32-year-old Newcastle woman who recently shared her unfortunate experience with a buy now, pay later ‘addiction’ that eventually led to a crippling $40,000 debt.
She got her first BNPL account when she was 25, and she admits her love of fashion was a big reason.
‘I realised I could buy more expensive things that I could never afford and before you used to lay-by things and pay them off slowly and have that long-term intrinsic reward system.’ she began.
‘Before I knew it I had this enormous debt, it was up to $1000 a fortnight coming out of my account, so it got quite out of control.’
With most BNPL providers offering delayed payment plans of four instalments every fortnight, she soon found herself trapped in a vicious cycle.
Jacqueline said: ‘Because it goes for that eight weeks by the time you have paid off an item of clothing you bought previously, you want the next thing.’
‘It was an addiction and then … I was struggling so much to pay it off and used (a) credit card… It all built up and before I knew it I was drowning.’
Despite working three jobs just to manage her loans, Jacqueline found no respite.
At the peak of her BNPL addiction, she had five accounts to support her spending addiction.
‘It started with clothes and make-up and then I think I realised how bad it was when it swapped to buying more day-to-day things and it wasn’t as fun.’
‘I was buying cat food, shoes, clothes and anything. I guess I was well and truly addicted to buying clothes. I was literally like Carrie Bradshaw from Sex and the City … and then it just continued,’ she said.
‘Even going to the hairdresser or your facial and all these things I used to be able to pay upfront and then before you know it you’re completely reliant on the system and it’s hard to get out.’
In one instance, Jacqueline bought a pair of shoes for $1000 — and she damaged them the first time she wore them.
‘I was realising it’s not good and it was just this real struggle …it was something really silly and embarrassing.’
‘It can be laughed about if you’re buying clothes that it’s a silly woman thing, but people have a lot of addictions to spending money, and you do get that adrenaline rush,’ she added.
Eventually, Jacqueline was forced to confront her addiction head-on. The road to recovery was hard, as in several instances she ‘relapsed’ by installing BNPL applications she previously removed from her phone.
Still, dollar by dollar, she worked on her debts starting from the smallest ones. When a loan would be fully paid, she would strike off the date on her calendar.
Jacqueline also took part in the trial of a new financial coaching application from lender Wisr called Wisr Today which wants to promote better spending habits among Aussies.
After almost a year of testing, users of the app reportedly saved an average of $377 per week through careful analysis of their spending triggers.
For Jacqueline, it also taught her not to judge herself too much because of her addiction.
At the end of last year in 2021, she closed her final BNPL account, as well as a challenging chapter of her life.
It remains unclear if she was able to fully pay off her debts yet, but certainly, it can be said that Jacqueline walks away better and wiser from her experience.
Now, you might be like Jacqueline once was and have a sizable amount of debt to pay. Where do you start?
Moneysmart recommends you begin your journey to being debt-free by knowing what you owe. Take note of details such as the amount of each debt, due dates, and minimum payments monthly (if there are any).
This might be such a scary thing to do, but you won’t know how to move forward unless you have a clear picture of how much you owe.
From there, work out what you can afford to pay and start even in small increments while making sure to prioritise things like rent and utilities.
Please call the National Debt Hotline at 1800 007 007 to take that first step if you need help.
Meanwhile, you can also draw some inspiration from this Aussie mum who paid off a whopping $69,000 debt in four years.
So, what is your reaction to Jacqueline's inspiring way out of debt? What tips can you offer other members so they can avoid ending up in similar situations?
Please share your advice and comments below!
Source: YouTube/Finder Australia
It's a service that many Aussies, particularly those with less than perfect credit and unable to secure a loan, have come to rely on, especially in this economy when things have improved a bit but are still… not great.
However, while BNPL gives those with credit troubles a bit of leeway to shop, it can also have devastating effects if used excessively.
Just ask Jacqueline Liddell, a 32-year-old Newcastle woman who recently shared her unfortunate experience with a buy now, pay later ‘addiction’ that eventually led to a crippling $40,000 debt.
She got her first BNPL account when she was 25, and she admits her love of fashion was a big reason.
‘I realised I could buy more expensive things that I could never afford and before you used to lay-by things and pay them off slowly and have that long-term intrinsic reward system.’ she began.
Jacqueline Liddell found herself $40,000 in debt after getting addicted to ‘buy now, pay later’ schemes. Credit: news.com.au/Jacqueline Liddell
‘Before I knew it I had this enormous debt, it was up to $1000 a fortnight coming out of my account, so it got quite out of control.’
With most BNPL providers offering delayed payment plans of four instalments every fortnight, she soon found herself trapped in a vicious cycle.
Jacqueline said: ‘Because it goes for that eight weeks by the time you have paid off an item of clothing you bought previously, you want the next thing.’
‘It was an addiction and then … I was struggling so much to pay it off and used (a) credit card… It all built up and before I knew it I was drowning.’
Despite working three jobs just to manage her loans, Jacqueline found no respite.
At the peak of her BNPL addiction, she had five accounts to support her spending addiction.
‘It started with clothes and make-up and then I think I realised how bad it was when it swapped to buying more day-to-day things and it wasn’t as fun.’
‘I was buying cat food, shoes, clothes and anything. I guess I was well and truly addicted to buying clothes. I was literally like Carrie Bradshaw from Sex and the City … and then it just continued,’ she said.
‘Even going to the hairdresser or your facial and all these things I used to be able to pay upfront and then before you know it you’re completely reliant on the system and it’s hard to get out.’
In one instance, Jacqueline bought a pair of shoes for $1000 — and she damaged them the first time she wore them.
‘I was realising it’s not good and it was just this real struggle …it was something really silly and embarrassing.’
Jacqueline used BNPL for even small purchases like cat food. Credit: news.com.au/Jacqueline Liddell
‘It can be laughed about if you’re buying clothes that it’s a silly woman thing, but people have a lot of addictions to spending money, and you do get that adrenaline rush,’ she added.
Eventually, Jacqueline was forced to confront her addiction head-on. The road to recovery was hard, as in several instances she ‘relapsed’ by installing BNPL applications she previously removed from her phone.
Still, dollar by dollar, she worked on her debts starting from the smallest ones. When a loan would be fully paid, she would strike off the date on her calendar.
Jacqueline also took part in the trial of a new financial coaching application from lender Wisr called Wisr Today which wants to promote better spending habits among Aussies.
After almost a year of testing, users of the app reportedly saved an average of $377 per week through careful analysis of their spending triggers.
For Jacqueline, it also taught her not to judge herself too much because of her addiction.
At the end of last year in 2021, she closed her final BNPL account, as well as a challenging chapter of her life.
It remains unclear if she was able to fully pay off her debts yet, but certainly, it can be said that Jacqueline walks away better and wiser from her experience.
Moneysmart recommends you begin your journey to being debt-free by knowing what you owe. Take note of details such as the amount of each debt, due dates, and minimum payments monthly (if there are any).
This might be such a scary thing to do, but you won’t know how to move forward unless you have a clear picture of how much you owe.
From there, work out what you can afford to pay and start even in small increments while making sure to prioritise things like rent and utilities.
Please call the National Debt Hotline at 1800 007 007 to take that first step if you need help.
Meanwhile, you can also draw some inspiration from this Aussie mum who paid off a whopping $69,000 debt in four years.
So, what is your reaction to Jacqueline's inspiring way out of debt? What tips can you offer other members so they can avoid ending up in similar situations?
Please share your advice and comments below!
Source: YouTube/Finder Australia
.png){kind=icon}
A fool and their money are easily parted!!!!!!
