NZ Herald: Black Friday & BNPL - The dark side of Christmas debt

NZ Herald recently featured a story on 'Black Friday & buy now, pay later - The dark reality of taking on Christmas debt' where our Money Sweetspot CEO, Sasha Lockley shed light on the risks of buy now, pay later debt that many Kiwis will take on this festive season. Here's a summary of the top insights, recommendations and tips:

• Many Kiwis will take on extra debt this festive season, but doing so has its risks.
• Sasha Lockley, co-founder and CEO of Money Sweetspot:
  • "The dark reality of debt for many people is it isn’t ever paid off."
  • “Debt becomes more like a rent payment that people get so used to paying, they don’t focus on getting rid of the repayment.”
  • “The trend we see in the younger generation is that the buy now, pay later (BNPL) facilities are used like a credit card. So they never really get paid off either."
  • "As Black Friday nears – a shopping season that has increasingly become popular for customers looking to get a head start on Christmas. Early indications that people are seeking debt for Christmas."
  • “So how are people managing Christmas? Looking for debt, because the idea of spending less isn’t their focus, it’s how to find the cash to spend now and worry later."
  • “It’s a trend that happens every year. Spend now and worry in the new year and find debt to pay off debt and reset and go again."
  • “The trouble is that means that every year people are maintaining or worsening their financial position through debt.”
  • "Debt pain really hits people when something unpredictable happens. Then the amount of debt that someone was able to afford becomes unmanageable,”
  • “She’ll be all right is an okay philosophy. Until she isn’t.”
• According to a recent survey from PriceMe, price comparison service, revealed 51% of Kiwis are planning to shop this Black Friday, up from 35% last year.
• Centrix figures estimate that around 458,000 Kiwis were behind on their payments in September, equating to 12.12% of the credit-active population and arrears are 3.5% higher than last year.
• BNPL has been the most popular first credit product by far since 2018, with 32% of new-to-credit consumers in 2023 and 2024 choosing BNPL as their first credit product.
  • On a positive note; BNPL arrears were trending backwards, falling to 6.1% in September, the lowest level since January 2022.

• Jeremy Hoskin, managing director at Super-Advice NZ shared:
  • "There were other options instead of spending money you don’t have this Christmas."
  • "Using debt to fund consumerist desires is simply robbing future you of the cash. We recommend things like: potluck family meals, homemade gifts that create memories and nostalgia with a reminder that Christmas is about family togetherness and gratitude – not spending money you haven’t earned yet."
  • "Taking longer-term loans or racking up credit card, store card debt that is not paid off in full during an interest free period is never a good option for the holiday season."

Before you make purchases using BNPL this festive season, educate yourself and have a plan. Our article 'The number 1 mistake people make with Buy Now, Pay Later' has tips three top tips you should know.

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