<
https://www.theguardian.com/business/2022/nov/07/australians-turning-to-buy-now-pay-later-schemes-for-groceries-stuck-in-a-revolving-door-of-debt>
"When Brooke Haebich and her partner had their first child they struggled to
afford groceries, but initially they thought they had found a lifeline in
Afterpay.
They began buying $200 gift cards for Woolworths or Coles on the buy now, pay
later scheme, and would then pay off the amount in four fortnightly instalments
of $50. But after a while, paying for essentials by going into debt was like
being stuck in a revolving door, Haebich says.
“It’s a life saver in that moment,” she says from her home in Wangaratta. “But
then your pay starts going towards repaying what you’ve spent, so then the
cycle begins; you haven’t got enough money to get groceries, so you use
Afterpay again to get another card.”
Financial counsellors say more and more people have turned to BNPL services to
afford essentials such as food, petrol, and bills since petrol prices suddenly
shot up in February. They expect the numbers to climb further as cost of living
pressures bite.
Claire Tacon, a financial counsellor at the Consumer Action Law Centre, says an
increasing number of people calling the National Debt Helpline have been sucked
into a debt spiral after turning to BNPL, leaving them in a worse financial
position than before they began using the scheme.
“Payments for these accounts are always direct debited so the company gets the
money first, then people don’t have enough to feed themselves and look after
their health, so they just keep reborrowing,” she says."
Note: I am currently employed by Block, the parent company of Afterpay.
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
