Buy Now, Pay Later should not be the default way to survive

New Straits Times

4 days ago

LETTERS: The first time using Buy Now, Pay Later (BNPL) felt harmless. Three easy payments for a pair of shoes. No interest, no hassle, no guilt. But that mindset is exactly what gets so many young people into trouble.
From 2020 to 2025, more than 5,189 Malaysians under the age of 34 were declared bankrupt. Most of them were between 25 and 34, an age group that should be building their financial future.
This is not just a statistic. It reflects a growing reality for many young adults trying to manage life's expenses with limited income and increasing pressure to spend.
With BNPL so widely available and heavily promoted, it's no surprise that more people are relying on it. The recent Consumer Credit Bill passed in Parliament shows how urgent the problem has become.
The new law introduces the Consumer Credit Commission to oversee BNPL and other non-bank credit providers. It's a step in the right direction, but the fact that it's needed at all speaks volumes.
BNPL is appealing because it feels light — no upfront payments, interest-free instalments, and fast approval. But the catch comes later, quietly.
Miss one instalment and there's a penalty. Miss a few, and the debt grows without warning. Penalties between RM10 and RM50 might not sound like much, until they keep stacking up. What began with one small item turns into four or five ongoing commitments.
BNPL encourages impulse decisions. The thought process is no longer "can I afford this," but "can I split this".
Bank Negara Malaysia reports that most users earn below RM3,000 a month. For many, even one missed payment affects rent, food or transport.
BNPL has helped some low-income families afford essentials like baby formula and groceries, especially during difficult times. That's understandable. But it shouldn't become the default way to survive.
In the first half of 2025 alone, Malaysians spent RM9.3 billion through BNPL. Some RM121 million of that is overdue. The numbers aren't slowing down.
What's worrying is how normalised it has become. Not just for emergencies or needs, but for clothes, gadgets and online shopping sprees. These habits can lead to ongoing debt that feels manageable at first but becomes overwhelming over time.
Regulation helps. But awareness matters more. Many still don't fully understand the risks they're taking. Educational institutions should do more to teach students about managing their money.
Financial literacy is a skill that needs to be taught and cultivated early, not learned after it has become a problem. BNPL is not the enemy. But without control, it turns into a cycle that's hard to break.