The buy now, pay later cost to Kiwis

More than 220,000 Kiwis use at least one of the four buy now, pay later companies operating in New Zealand.

While this pay-later segment continues to come under scrutiny in Australia, the Government decided not to include pay-later products in local credit regulations.

Lasting impact

With banks scrutinising spending habits more than ever before, the use of this payment option could have a very real impact on your future credit.

Many buy now, pay later providers don't check your repayment ability or your credit history. This means you could end up with credit you can't afford and have trouble repaying.

Your bank statements will show if you're a regular pay-later service user and you may need to clear these debts before a home loan is approved.

Before delaying payment

• Forward plan: Use buy now, pay later services as a last resort. Budget for your big spends and if you must use these services, consider any other bills or repayments first.

• Don’t overcommit: Keep track of your payment commitments and make sure you make them. Try not to pay for these services on credit that may gain interest and more debt.

• Get help: If you find that you’ve put too much on your buy now, pay later account, contact the provider immediately to discuss any hardship you are experiencing.

To learn more about how using pay-later services could impact your mortgage application, contact a Mike Pero Mortgage Adviser today.