Is buy now pay later regulated in Australia?

Yes. Since 10 June 2025, buy now pay later is regulated as credit. Providers need an Australian Credit Licence, must check a plan isn’t unsuitable for you, must consider hardship requests, and must belong to AFCA, so you can complain for free.

Does buy now pay later affect my credit score?

It can. Providers can check your credit report when you sign up or ask for a higher limit, and late or missed payments can be reported. A debt over $150 that’s 60 days overdue can be listed as a default for 5 years.

What happens if I miss a payment?

The provider can charge a late fee and stop you using the account until you’ve caught up. Unpaid amounts can go to a debt collector. If you can’t pay, contact the provider early and ask for hardship help.

Will buy now pay later stop me getting a home loan?

Not on its own, but lenders look at your accounts, limits and repayments in your bank statements. Several plans at once can lower how much they’ll lend, so pay them off and close accounts you don’t use before you apply.

How do I complain about a buy now pay later provider?

Complain to the provider first. If it doesn’t fix the problem, take it to the Australian Financial Complaints Authority (AFCA). It’s free and independent.

Buy now, pay later in Australia: costs, credit and the rules

How it works

At the checkout, in a shop or online, you choose a BNPL provider such as Afterpay or Zip. The provider pays the shop, and you pay the provider back:

Pay in 4: a quarter now, then 3 payments a fortnight apart, taken from your card. There’s usually no interest.
An account with a limit: some products let you spend up to a limit and repay over time, and charge a monthly account fee in any month you owe money.
Longer plans over months or years. These often charge interest, sometimes as much as a credit card.

A $200 purchase, paid in 4 No interest if every payment is on time.

1 $50 Today
2 $50 In 2 weeks
3 $50 In 4 weeks
4 $50 In 6 weeks

Each payment is taken from your card or bank account automatically. If one fails, a late fee can be added.

What it really costs

On a $200 purchase split into 4, you pay $50 now and $50 every fortnight. If a payment fails, the provider can charge a late fee, and may stop you using it until you’ve caught up.

The bigger risk is stacking plans. Three at once, at $50, $40 and $30 a fortnight, take $120 out of each pay for 6 weeks, and new purchases keep it going. Because there’s no interest, it’s easy to forget BNPL is still borrowing.

The rules since June 2025

Since 10 June 2025, BNPL has been covered by Australia’s consumer credit laws, overseen by ASIC:

Providers need an Australian Credit Licence.
They must make sure a plan or limit isn’t unsuitable for you before you use it, which can include a credit check.
Fees are capped for plans with no interest. Plans that charge interest follow the same full credit rules as a credit card or personal loan.
If you’re in financial hardship, you can ask the provider to change your repayments, and it must consider the request.
Providers must belong to the Australian Financial Complaints Authority (AFCA), which handles complaints for free.

Your credit report

BNPL is credit, so it can show on your credit report like a card or loan:

Applications and limit increases can lead to a credit check.
Repayments can be reported each month: paying on time builds your history, and late payments count against you.
A default can be listed if you owe more than $150 that’s 60 days overdue, and it stays for 5 years.

When you apply for a home loan, lenders also look at your BNPL accounts and repayments in your bank statements. See credit scores explained.

Use it safely

Count it in your budget as soon as you buy, not when the payments come out.
Stick to one provider, so you can see everything you owe in one place.
Pay from a debit card with money in the account, not a credit card.
Don’t use it for everyday costs. If you need it for food or bills, call the free National Debt Helpline on 1800 007 007: see help with debt.