‘Buy now’ pay later’ schemes are the most common form of debt, the Salvation Army says. Photo: stock.
The Salvation Army says people need take a fresh look at their finances now, at the start of a new year.
And it says ‘buy now’ pay later’ schemes are the most common form of debt, even more than credit cards.
The Salvos says new research shows 46 per cent of all Australians are starting 2025 in debt, 3.2 million (15 per cent) don’t understand how interest works and almost one in three (30 per cent) are unable to create a budget.
It also says that during the Christmas holidays, over 34 per cent of people used credit cards, 17 per cent used ‘buy now, pay later’ schemes, 6.3 per cent borrowed money and 8.9 per cent sold personal belongings.
“The start of the year is the perfect time to take a fresh look at your finances and plan for the year ahead,” says the head of The Salvation Army’s Moneycare service, Kristen Hartnett.
“Our research shows that people are really struggling, with the increased cost of living adding extreme pressure on individuals and families across the country, and many find themselves in crippling debt or financial distress.
Moneycare is a free and confidential financial counselling service that helps thousands each year get on top of their financial situation.
In the last financial year, Moneycare provided 52,000 sessions to those struggling with their finances; 27 per cent of those who reached out were employed, the Salvos say.
“We have noticed a worrying trend in the past year — ‘buy now, pay later’ products have overtaken credit cards as the most common form of debt among our community members,” Hartnett says.
“Many (are) using these schemes to make ends meet, paying for items such as groceries and pharmaceutical items using these methods.
“This is particularly concerning, as many Australians do not view ‘buy now, pay later’ products as a form of debt, when in reality it can lead to a rapid and crippling cycle of debt as a result of fees,” she says.
“We also want people to know that they are not alone and there is no shame in reaching out. Please don’t delay — seek help early and reach out to Moneycare today.”
To contact Moneycare, visit salvationarmy.org.au/moneycare or call 1800 722 363.
