Morgan Rowbottom thought she had buy now, pay later figured out.
The 29-year-old Tasmanian had been using Afterpay for nearly a decade without ever missing a payment, carefully managing her spending.
But even she gets caught out when payments from different purchases start stacking up.
“I’ve definitely probably put one too many things on and then it’s been like on opposite weeks, so every single week there’s an Afterpay payment,” she said.
“I’ve kind of forgot about them and then it’ll come out and I’ll be like, why am I missing $30?”
Her story reflects a growing trend, according to a new survey of 500 young Tasmanians.
It found that while many young people are feeling upbeat about the future, they’re also grappling with debt, missed repayments and shrinking savings.
The survey, conducted by MyState Bank and youth support service Home Base, shows nearly half of Tasmanians under 35 are using buy now, pay later services.
But 36% are missing their repayments and one in three have missed a debt repayment of some kind in the past year.
“It’s encouraging to see optimism about the future, but the number of young Tasmanians relying on high interest non-bank credit to cover everyday costs is a real red flag,” CEO of MyState Brett Morgan said.
Dianne Underwood, CEO of Home Base, said buy now pay later services now require far less rigorous credit checks than traditional loans, making them available to almost everyone.
“We’re seeing people use it as a valid tool to just deal with the increasing cost-of-living pressures,” Underwood said.
“The survey also showed that about one in three weren’t paying off the debt in that time. So they’re paying a lot more for the product than they would if they’d saved for it in the first instance.”
Both organisations are calling for financial education to be taught in schools, so young people can better manage debt and build healthy savings habits.
