March 10, 2025
PETALING JAYA – Ahead of online shopping deals with the approach of Hari Raya, young people are not deterred by warnings from financial experts against embracing buy-now-pay-later schemes.
With some even lauding these schemes as a better alternative to credit cards, they say the key to sustainable borrowing is financial literacy and discipline.
A public relations executive, who only wished to be known as Tim, 27, said BNPL services have been helpful in “breaking up” his larger purchases.
However, he did acknowledge that purchases through these schemes can sometimes creep up on him.
“It’s easy to lose track of what you’ve bought,” he admitted.
To stay on top of his purchases, Tim tries not to take on more than one instalment plan at a time.
He said while he had initially been hesitant to sign up for a BNPL service, he decided to press on after finding out that the interest rate from one provider was 0% should he pay off the purchase on time.
“I have my payments set to auto-deduct so I never incur any interest charges or late fees,” he said.
Tim advised other young people that to avoid falling into debt, they should know the payment terms as well as the interest rates.
“And make sure you don’t have more money going out of your account than you have in it.”
Assistant manager Reshma Nair recalled her first purchase using a BNPL provider at an athleisure store, which she has used for over two years now without issue.
However, she expressed concerns about widespread usage, especially among the youth.
“It creates a false sense of affordability since the immediate payment is smaller but over time, it can accumulate into larger debts,” said the 26-year-old.
She stressed the importance of having a strong financial grounding before opting for such schemes.
“Many young people may lack the financial knowledge to fully understand the impact of using these services, especially if they haven’t yet developed a strong understanding of budgeting, saving and debt management,” she added.
Senior manager Alyssa Haniff, 29, said while it might be easy to overspend when using BNPL services, some providers offer “spending caps” to help users manage their budgets.
“The spending cap helps a lot,” she added.
She said this feature, which is set based on a user’s income, make her feel like BNPL schemes are safer than traditional credit cards.
She also described the thorough financial review process involved to determine a user’s cap.
“Honestly, I believe credit cards are more dangerous when it comes to debt. You can just request to increase your credit card limit with a phone call,” she pointed out.
Taranee Puteri, 28, said she tries to limit her purchases through these BNPL providers for emergencies or big, urgent buys to avoid getting trapped in debt.
The communications professional said BNPL services have been helpful with her current lack of disposable income, spreading out the sum so that she feels “less of a pinch” in her finances.
She advised her peers to be forward-thinking in their financial decisions and to always spend within their means.
“Everything in moderation.”