Sealing off gateways to debt: Ensuring responsible use of Buy-Now-Pay-Later schemes

The Buy-Now-Pay-Later (BNPL) scheme has become a popular alternative to traditional credit cards, especially among young Malaysians. Its appeal lies in spreading payments for items of any range. It’s particularly beneficial for smaller household items, such as smaller-end furniture like desk lamps and bookshelves, making it an attractive option for those starting a new home. However, BNPL, not to be mistaken for credit cards and loans, is not meant for large-scale purchases like houses or vehicles, as it can create a false sense of financial capability.

Users must distinguish between wants and needs, especially during festive seasons, to avoid overspending. Financial literacy is crucial in managing BNPL commitments. The Education Minister should consider the sustainability of incorporating education on personal finance and basic accounting at the secondary school level. These lessons, along with role-playing real-life experiences, may equip young people with the skills needed to budget wisely and understand debt management. Encouraging a mindset of living within one’s means and recognising that BNPL does not equate to having additional disposable income is essential.