Buy now pay later, payday loans and fast cash: why to be careful

What these products are

Product	How it works	Main risk
Payday / high-cost loans	Small, short-term loans with high fees and interest, often repaid on payday	Costly; many people borrow again to repay; a debt spiral
Buy now pay later (BNPL)	Split purchases into instalments, often interest-free if you pay on time	Late fees, several accounts at once, the 'invisible' debt
Mobile traders / truck shops	Goods sold on credit at doorstep, often with high prices and weekly payments	Total cost is often far above shop prices
Pawnbroker / cash converters	Items pledged for cash	You may lose the item; fees
Loan sharks / social media lenders	Unregistered lenders offering fast cash	Illegal conduct, threats, extortionate interest. Report them

Why they hurt more when you're out of work

Income is lower, but repayments are fixed, so the gap widens.
Several small payments (BNPL, credit card, loan) can add up faster than you realise.
Defaults can affect your credit report and your ability to get a rental or loan later.
Lenders see benefit income as risky; terms are often worse.

Safer alternatives (in order)

Work and Income: grants and benefit advances for urgent costs (food, power, car repairs, medical). Call 0800 559 009. Advances are limited by cash and asset tests: the current advance limit is $1,411.22 single or $2,351.46 couple (check current limits).
Good Loans (Good Shepherd NZ): low- or no-interest loans for essentials. Ask MoneyTalks about eligibility.
Ask your existing creditor for hardship help before borrowing more.
Credit unions, community lenders and family or whānau loans (agree repayment terms in writing).
Free mentoring: MoneyTalks 0800 345 123 (text 4029).

If you already have these debts

Stop taking new BNPL purchases. Pause or close accounts.
Contact each provider and ask for a hardship arrangement; many BNPL providers will pause fees.
For payday loans, ask for a repayment plan and a freeze on fees; get help from MoneyTalks before borrowing again to repay.
If you think you've been treated unfairly, complain to the lender, then the dispute resolution scheme, then the FMA.
Report unregistered lenders to the FMA or Consumer Protection (Ministry of Business, Innovation and Employment).

BNPL hardship request

I've lost my job and can't make my instalments on time. I'm asking for hardship help: please pause my account, waive late fees and spread what I owe over smaller payments of [amount]. Please confirm in writing and tell me how this will be recorded on my credit file.

Sources

General information only. Confirm with the agency for your situation. Spotted something out of date? Email help@unemployed.nz.