Buy now, pay later (BNPL) payments are available to Kiwis teens from the age of 18. It means you can purchase something now, then pay for it over time, often with no interest or fees. Sounds too good to be true? Well, yes. It’s definitely a buyer beware situation.
So, what’s not to love about a delayed payment purchase offer? A few things, actually.
- Another form of debt
BNPL purchases can add up quickly, so there’s a risk of putting yourself in a position where you can’t cover repayments. You must remember these schemes are just another form of debt, like overdrafts or credit cards.
- Missed payment fees
There are many BNPL offers, so do your research on how you are required to pay back the purchase and choose the one that offers the lowest missed payment fees.
- Multiple schemes
Juggling more than one BNPL purchase over more than one scheme can be difficult to maintain, so only use one service.
- Missed payment fees
Keep track of when payments are due so that you can make your payments on time and avoid racking up missed payment fees. Read the fine print and learn what happens if you miss a payment.
- Credit rating
If you miss repayments, you will start accumulating fees. If you miss too many, it can affect your credit rating which could have major repercussions and make an impact on your financial future. Your credit rating is an indication of how likely you are to pay your bills on time. Banks will look at your credit rating when you apply for a home loan or credit card.
- Impulsive shopping
It is tempting to splurge or shop impulsively in the moment when you don’t need to pay for the items up front immediately. But be careful, you don’t want to rack up avoidable unwanted debt.
In New Zealand, buy now, pay later schemes are available to customers from the age of 18 years with debit card or credit card details and a valid New Zealand ID.
It is tempting for young Kiwis to sign up and commit to BNPL schemes with its enticing plans, but as the old adage says: nothing comes for free.
NSBS is committed to delivering financial mentoring to young New Zealanders aged 15–24 not in education, employment or training (NEET) with a targeted financial wellbeing programme and money literacy skills.
Our targeted BFC (building financial capability) programme offers key skills to young school leavers, from those going on to tertiary study or jobs, to those disengaged in employment and education and who need support and guidance into a first job or apprenticeship.
Fostering financial capability among young Kiwis, or taiohi, who are disengaged in the labour market and education, and who need encouragement and empowerment for employment preparedness, is part of the Government’s strategic vision for financial capability. NSBS shares these values and vision and is committed to realising the aspirations of young New Zealanders by delivering a financial mentoring programme of social and economic change.
“Kiwis young and old face increasing costs and pressures to find their financial independence and financial security as the cost of living and inflation rises. Our financial mentoring course provides valuable budgeting skills, employability tools, and empowerment opportunities,” said NSBS CEO Drew Glucina.
“For young taiohi disengaged or inactive within the labour market or education, having financial wellbeing knowledge is one step closer to employment and apprenticeships.”
Youth who are not in employment, education, or training (NEET) in New Zealand have become a growing concern for the Government and represents a community most at risk of socioeconomic hardship, especially in a post-Covid world with high job insecurity and declining secondary school attendance rates.
The percentage of 15 to 24-year-old Kiwis not earning or learning in the year to March was 11.5% – up from 10.9% last quarter.
The economic cost of supporting taiohi NEET is significant, as is the cost to their physical and mental health, with Māori and Pasifika most at-risk. Those Kiwis who spend time not in vocational training, employment or education are statistically more likely to be unemployed, receive lower wages, have a criminal record, suffer from health problems and depression, and experience lower levels of life and job satisfaction.
As a skills-training initiative, our customised financial mentoring programme provides practical intervention, life empowerment, and work placement opportunities that will improve long-term economic outcomes.
The development of the programme is designed to prevent disengaged youth at risk of becoming a MSD beneficiary in the future, or who are at present. It addresses fundamental economic challenges, including poor health and wellbeing outcomes, low social mobility, and an entrenched productivity gap.
What they will learn on the NSBS BFC youth programme:
- Core life skills in how to manage their own day-to-day finances.
- Tools to better budgeting and money planning.
- Financial capability training, money habits and reducing money anxiety.
- KiwiSaver opt-in, fund scheme, and payments.
- How to set up a bank account and control their money online.
- Automatic payments and tithes.
- Savings accounts and interest rates.
- Online banking and contactless payments.
- Avoidance of debt.
- Credit cards and debit cards.
- Pitfalls of pay-later suppliers.
- Being financially independent and confident about money.
- Investing for beginners.
- Self-control spending.
- Overdrafts, loans and comparing borrowing options.
- Fraud and bank scams.
- Bank transaction fees.
- How to save for a goal, such as a car, a home or wedding.
- Car, contents, and health insurance.
- Friends and family members looking for a loan, borrowing or payment.