As Australians grapple with increasing debt levels, many are turning to Buy Now, Pay Later (BNPL) services like Afterpay for financial relief. Recently, Afterpay introduced a voluntary spending cap, allowing users to set their own limits. However, financial expert David Grafton argues that this measure is insufficient for those already in financial distress. He points out that individuals facing financial hardship are unlikely to self-impose spending limits when they are in dire need of funds. Grafton emphasizes the need for urgent regulatory reforms in the BNPL sector, which currently lacks the same oversight as traditional lenders. His research indicates that many users prioritize BNPL payments over essential bills, leading to increased financial stress, particularly among younger Australians. Grafton advocates for improved financial literacy alongside regulation to help consumers navigate the complexities of BNPL products and avoid falling into deeper debt.
Read the full article here.