Buy Now Pay Later (BNPL)
Services like Afterpay, Laybuy, and Zip that let you buy now and pay in instalments. No interest if you pay on time, but late fees add up. Counts as debt and can affect your credit score.
Buy Now Pay Later (BNPL) services let you purchase items immediately and pay in instalments — typically 4 payments over 6-8 weeks. In New Zealand, popular BNPL services include Afterpay, Laybuy, Zip, and Humm.
The appeal is that there's no interest if you pay on time. However, late fees can be significant — often $8-$15 per missed payment, and they add up quickly if you're juggling multiple BNPL commitments.
Importantly, BNPL usage is now reported to credit agencies in NZ. This means using BNPL can affect your credit score, and lenders (including mortgage lenders) can see your BNPL history when you apply for credit.
Why this matters
BNPL can be a useful tool for managing cash flow on occasional purchases, but it becomes dangerous when used frequently or across multiple providers. Many people don't realise that mortgage lenders now scrutinise BNPL usage — having multiple active BNPL accounts can reduce your borrowing capacity. If you're planning to apply for a mortgage, consider closing BNPL accounts well in advance.
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