Data from Australian credit bureau Experian has revealed enquiries into short-term lending products such as Buy Now, Pay Later (BNPL), credit cards, and personal loans have lifted over the last 12 months.

Enquiry volumes for BNPL services have increased by 28% in the year since February 2022, as cost of living and interest rate pressures continue to hit consumers’ hip pockets.

After a drop in BNPL enquiry volumes in January 2023, February data shows a lift of 55% month on month. 

This is the highest observed figure since the seasonally high retail spending pre-Christmas period of November 2021.

“The lending landscape has changed significantly over the last two years driven by the evolving needs of everyday Australians amidst inflation and other forces,” said Tristan Taylor, Experian General Manager of Credit Services.

“Many Australians with mortgages and loans are likely to be feeling the economic pinch so lenders need to adapt.”

Recent research from open banking provider Frollo also highlighted the growing appetite for BNPL and pay advance services.

Across Frollo’s 31,372 users, 32% accessed BNPL services in the first quarter of 2023, an increase of 7% from the same period last year. 

The data found users are also spending 9% more totalling $420 per month.

This comes after Australia’s BNPL industry is set to be regulated under credit laws in a move to ensure consumers remain better protected. 

See Also: Will regulation be the final nail in the coffin for BNPL?

Speaking with Savings.com.au, FIS Banking and Payments Specialist Rob Tesoriero said demand for BNPL is here to stay, despite regulation changes.

“From a consumer perspective, while the number of players in Australia has decreased, customer demand has remained steady,” Mr Tesoriero said.

“While our forecast for BNPL growth is slowing, in no markets do we see demand for this form of credit decreasing.”

Geri Cremin from Credit Smart told the Savings Tip Jar podcast that BNPL is just like any other credit product.

However she said different BNPL platforms interact with reporting differently, which is where credit regulation will level the playing field.

"The current situation is really complex, which is why this conversation is happening around how buy now pay later might be regulated moving forward," Ms Cremin said.

"When it comes to an individual using buy now pay later and how it affects their credit health, lenders will also look at how you're managing your repayments. Buy now pay later repayments are another type of credit repayment, and it goes into the full picture of your credit health when applying for a loan."

Credit cards also getting a workout

Turning to credit cards, enquiry volumes increased 31% since February last year and 54% since February 2021 according to Experian data.

Recent RBA credit card data also showed Australian debt grew to $18.4 billion in April.

Personal loans with Australia’s big-four banks also saw an elevated number of enquiries - 26% in the last 12 months since February 2023.

February this year experienced the second highest number of enquiries for personal loans over the last two years as Australians dealt with eight consecutive months of rate rises.


Advertisement

Credit card

N/A0[Enjoy the benefits of our lowest rate on everyday purchases. 0% p.a. on Balance Transfers for 28 months on a new NAB Low Rate Card. No Balance Transfer fee applies. Plus, enjoy no annual fee for the first year (usually $59)* Apply by NAB may vary or end this offer at any time. You’ll also enjoy the benefits of our lowest ongoing rate on everyday purchases. Up to 55 days interest free on purchases do not apply with an outstanding balance transfer. Additional cardholder at no extra cost. Your choice of a pink or silver card. Apple Pay, Google Pay, Samsung Pay, ]0015$product[$field["value"]]21.74VisaMore details

NAB Low Rate Card

    N/A0[0%p.a. on purchases and balance transfers for 18 months reverting to the cash advance rate thereafter. No balance transfer fee. Low interest rate. Low annual card fee. Up to 55 days interest-free on purchases. If you currently have a credit card or store card elsewhere, you can easily transfer the outstanding balance to a Low Rate Visa Card and start saving right away. Samsung Pay, ]01510$product[$field["value"]]21.49VisaMore details

    Bank of Queensland Low Rate Visa Card

      N/A0[Get 0% p.a. for 28 months on balance transfers and $0 Annual Account Fee in First Year with an ANZ Low Rate credit card (no Balance Transfer Fee). $0 Total Annual Fee for the first year - $58 thereafter Eligibility criteria, T&Cs, fees and charges apply. Offer ongoing until further notice. Low ongoing interest rate of 13.74% p.a. on purchases. Up to 55 days interest free credit on purchases. $0 annual fee for the first year - $58 thereafter View balances, transfer money and make payments simply and easily with the ANZ App. Apple Pay® and Google Pay let you use your compatible Apple® or Android™ device to tap and pay with an eligible ANZ credit card. Apple Pay, Android Pay, Google Pay, Samsung Pay, ]0020$product[$field["value"]]21.99VisaMore details

      ANZ Low Rate Visa

        N/A0[You get up to $350 cashback when you take out a new Low Rate Credit Card. $50 cashback will be awarded for every month $1000 or more is spent on Eligible purchases for the first seven statement periods from card approval. Eligibility criteria and T&Cs apply. + $59 annual fee. Up to 55 days interest free on purchases when you pay the closing balance of your statement in full by the statement due date. Make the most of the balance transfer by creating a balance transfer repayment plan with SmartPlan., ]0015$product[$field["value"]]21.99MastercardMore details

        Westpac Low Rate Card (Cashback offer)

          N/A0[Enjoy 0% p.a. on purchases for the first 3 months + up to $240 cashback Our lowest interest rate on purchases at 13.24% Control your security and spending - instantly lock international payments, block ATM cash advances and limit your spending through the CommBank app or on NetBank. Minimum credit limit $500 Monthly Fee $6/mo (equivalent to $72 per year) Android Pay, Google Pay , ]0020$product[$field["value"]]21.99MastercardMore details

          Commonwealth Bank Low Rate Credit Card

            N/A0[Low ongoing interest rate. Low annual fee. Microchip for extra security. Global acceptance of Visa. Access to Visa Entertainment. Visit macquarie.com.au/cards for full details and terms and conditions. Zero liability unauthorised purchases with Visa’s Zero Liability Policy*, ]01020$product[$field["value"]]15.95VisaMore details

            Macquarie Bank RateSaver Card

              Important Information and Comparison Rate Warning

              All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of December 11, 2024. View disclaimer.

              Important Information and Comparison Rate Warning

              Image by rawpixel.com via freepik