Despite the country’s hesitancy to spend at the start of the Covid-19 lockdown, recent figures from ME Bank found that Aussies aren’t ready to give up their plastic just yet.
According to the ME Household Financial Comfort Report, credit cards are still the nation's preferred payment method, with 46% of respondents claiming they had used their credit card in the past six months.
Surprisingly, it was Buy Now, Pay Later (BNPL) services that were on the decline, with only 13% of Aussies reporting they had used a BNPL platform within the last six months.
“Buy Now Pay Later certainly hasn’t replaced the credit card yet. Credit card usage is holding steady while Buy Now Pay Later is dropping,” said ME general manager personal banking, Claudio Mazzarella.
“It doesn’t matter how innovative the lending method is, most Australians are wary of getting into more unsecured debt in the midst of a global and domestic economic crisis,” he said.
What the average BNPL user looks like
While it’s no secret that BNPL services are more often used by the younger generation, ME’s research indicates that a typical BNPL users is probably:
- gen Z or gen Y
- a single parent (if they have children)
- a student, part-time employed, responsible for home duties or unemployed
- holding less than $1,000 in savings
- renting, or if they own a house, has a property valued at $300,000 or less
- receiving some form of government benefits.
This data correlates within a 2019 Illion Credit Card Nation report, which found that millennials make up 10% of the credit card market, suggesting an anxiety about carrying debt or an inability to apply for a credit product.
“The average Buy Now Pay Later user is younger and less financially comfortable. They may be wary of credit cards in general or unable to qualify for a credit card,” said Mazzarella.
The report also found that millennials represent more than the majority (53%) of the BNPL market.
If you’d like to read more about what the future of credit cards could look like among millennials, check out our comprehensive report.
And you can always use our free credit card comparison tool to help you find your next plastic match!