Buy Now Pay Later (BNPL) services – such as Afterpay, Humm and Zip Pay – are a popular way for young people to buy things today, then pay them off over a period of time.

However, it’s common for people to get into trouble if they miss a repayment and attract late fees.

A survey a few years ago from the Australian Securities and Investments Commission (ASIC) found around one-in-five people had missed payments, with some taking out other loans or going without food to cover their payments and fees.

Another survey, from Good Shepherd, found it’s commonly reported that people use multiple BNPL products to cover their debts.

Read more: What happens if you miss a BNPL payment

The difference between BNPL and credit cards

BNPL products aren’t regulated in the same way as other credit products, like credit cards, which the government says means they don’t have to follow the same checks other providers do. Before issuing a credit card, banks and other lenders generally have to try and make sure people can afford to pay back the money and the interest. The same rules haven’t applied to BNPL.

However, recently, the Federal Government introduced legislation to change the rules around BNPL products, so that they are regulated in a similar way to other credit products.

“If it looks and acts like credit, then it should be regulated as such,” Financial Services Minister Stephen Jones said.

Under the legislation, BNPL services will have to consider whether a consumer can afford to make the repayments and is suitable for the product before they’re given access.

If you’re in trouble with BNPL or a credit card debt

If you owe money and are having trouble repaying your debt, you can speak to a financial counsellor for help:

• National Debt Helpline – 1800 007 007
• Mob Strong Debt Help – 1800 808 488

Like every article on this website, this is not personal financial advice.