The Role of Credit Cards, Payday Loans, Consumer Leases and Buy-Now-Pay-Later Products in Personal Insolvency

Abstract

Payday loans, consumer leases and, increasingly, buy-now-pay-later (BNPL) products occupy a central place in Australian consumer law and policy debates. These products have all been identified by consumer advocates as a source of financial stress. Credit cards typically receive far less attention in these debates. Yet some policymakers have expressed concern regarding the significant credit card debts owed by Australian consumers, particularly those on low incomes. These commentators point out that low-income earners are the most likely to carry ongoing or “revolving” balances on their credit cards, and that therefore they pay more in interest, relative to their incomes, than high-income ear..