Recovering from your buy now, pay later Christmas hangover

If you, like many Australians, have paid for your Christmas shopping through buy now, pay later platforms, you may find yourself with one or more repayments you’re now struggling to manage.

Many buy now, pay later (BNPL) platforms will limit new accounts to one order at a time. But there is no limitation to the number of BNPL platforms you can join at any given time. And each BNPL platform will charge its own fees, such as late payment fees and account-keeping fees.

A recent report from Financial Counselling Australia found that 61% of counsellors surveyed reported that most, or all, of their clients using BNPL struggled to meet living expenses. A further 81% of counsellors reported their clients now struggling with BNPL-related debt, a sharp increase from 31% the year previous.

Just like any financial product, BNPL platforms can be a useful tool when used responsibly. But if you’ve made multiple holiday purchases on one or more platforms, you may find that the next few weeks of payment due dates are hard to manage.

Thankfully, there are several steps you may take to help get you back on your feet this new year. So, let’s explore how you can recover from your BNPL Christmas hangover and kick financial goals in 2022.

How to manage multiple BNPL repayments

• Make a list, check it twice

First things first, you will want to create a list or a spreadsheet that outlines every BNPL purchase you made and when each payment is due. This is particularly helpful if you spread multiple payments over several BNPL platforms.

Just like with any bill payments, setting reminders and keeping track of your payments can help prevent scenarios in which a payment is taken from your bank account, but funds are not available. If you were to miss any payments, you are likely to have to pay a late payment fee.

• Make a budget and stick to it

Secondly, you’ll want to go through your finances with a fine-tooth comb. Take stock of your income, your regular savings, your regular expenses (like bills and rent/mortgage payments) as well as other ongoing payments, such as gym memberships, subscription services and dinners out.

Now, depending on the size of your BNPL debt, you may want to consider ways you could reduce these expenses and funnel more of your income towards these repayments. The smallest changes, such as cutting out your second daily coffee or pausing a subscription, could help you over the next few weeks of repayments.

• Sell some belongings

One of the easiest ways to make some fast cash is to sell your belongings, and if you’ve accrued a few items you’ll never use again post-lockdowns, or even were gifted some Christmas presents from distant relatives (emphasis on distant – don’t hurt any feelings) that don’t suit, consider selling these for much-needed cash.

Online platforms such as Facebook Marketplace and Gumtree make this process easier than ever before. Take a weekend to go through your belongings and pick out a few that could be better served in someone else’s house, with their cash in your wallet.

• Request support

If you’re seriously struggling to avoid the late payment fees and get on top of your BNPL holiday purchases, don’t hesitate to reach out to your BNPL provider. Let them know that you’re struggling to meet repayments and they may be able to help you with a new payment plan, or even offer a late fee or repayment pause while you get back on your feet.

Major providers, like Afterpay, provide hardship platforms to help their customers quickly access support when you’re struggling to make repayments. If you need any further help, don’t hesitate to reach out to the National Debt Helpline, a not-for-profit service offering advice for debt problems, on 1800 007 007.

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