Is buy now, pay later regulated in New Zealand?

Yes. Since 2 September 2024, providers must belong to an approved dispute resolution scheme, check your credit before giving you a limit over $600, and help you if you’re in hardship.

Does buy now, pay later affect my credit score?

It can. Providers may check your credit when you sign up or raise your limit, and missed payments that go to debt collection can show on your credit report.

Does buy now, pay later stop me getting a mortgage?

It isn’t counted in the Reserve Bank’s debt-to-income limit, but banks still look at your spending, including your BNPL payments, when they check you can afford a loan. Clearing plans before you apply helps.

What happens if I miss a BNPL payment?

You’ll usually pay a late fee and can’t use the account until you catch up. Unpaid amounts can be passed to debt collectors. Contact the provider before a payment is due and ask about hardship help.

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

Complain to the provider first. If it doesn’t sort it out, take it to the dispute resolution scheme the provider belongs to, which is free for you to use.

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

How it works

At the checkout, online or in store, you choose BNPL and the provider pays the shop. You pay the provider back:

Pay in 4: a quarter now, then 3 payments every 2 weeks, taken automatically from your card or bank account. There’s no interest if every payment goes through.
Longer plans and “interest-free” deals: these are often a credit card or loan in disguise. When the interest-free period ends, anything left is charged interest at a high rate, and there can be account and establishment fees.

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.

The rules that protect you

Since 2 September 2024, BNPL providers in New Zealand have had to follow parts of the credit contracts law (the CCCFA). They must:

Check your credit before giving you a limit over $600, or raising it above that.
Help you if you’re in hardship, for example by giving you more time to pay.
Belong to an approved dispute resolution scheme, which you can complain to for free if the provider doesn’t fix a problem.

What it really costs

On a $200 purchase split into 4, you pay $50 now and $50 every 2 weeks. If a payment fails, the provider can charge a late fee and stop you using it until you’ve caught up. Your bank may charge a dishonour fee too.

The bigger risk is having several plans at once. Each one looks small, but they overlap:

Three pay-in-4 plans, two weeks apart An illustrative example: $600 of shopping, and what comes out each fortnight

At the busiest point, $150 comes out in one fortnight. Each plan looks small on its own: it's the overlap that catches people out.

Your credit and a home loan

Signing up or raising your limit can mean a credit check, which shows on your credit report.
Missed payments can be passed to debt collectors, and an unpaid debt can be listed as a default for up to five years.
Home loans: BNPL isn’t counted in the Reserve Bank’s debt-to-income limit, but banks look at your bank statements and spending when they check you can afford a loan. Regular BNPL payments reduce what they think you can afford.

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, which adds interest.
Set a reminder a day before each payment, and keep enough in the account.
Don’t use it for everyday costs. If you need it for food or bills, call MoneyTalks on 0800 345 123 for free help: see help with debt.