A new survey reveals that Kiwis are ditching credit cards in favour of buy-now-pay-later (BNPL) schemes, which is saving them millions in interest fees.

Kiwi-owned BNPL business Laybuy surveyed 1600 users to find out the impact the booming BNPL industry is having on the credit card sector.

Laybuy, like other providers, offers deferred payment that allows consumers to pay for purchases over six weeks and they do not charge interest like credit cards.

According to their survey, New Zealanders of all ages are abandoning traditional credit cards in favour of BNPL.


The company estimates this change is saving its customers $12.4 million in credit card interest annually.

Laybuy found that 66 per cent of its respondents believe BNPL is a better way to manage money compared with credit cards, whereas less than 1 per cent of respondents indicated they use credit cards more than BNPL.

They also found that 45 per cent of Laybuy users do not currently hold a credit card, with those who had previously had one indicating they had given up for a number of reasons, including:

• 55 per cent who said they don't need to purchase on credit because they can use BNPL instead
• 50 per cent who said they were worried about accumulating debt
• 30 per cent who were worried about the interest they were being charged with credit cards

The survey found that 45 per cent of Laybuy users do not currently hold a credit card. Photo / Getty Images
The survey found that 45 per cent of Laybuy users do not currently hold a credit card. Photo / Getty Images

When it comes to age, Laybuy found that 49 per cent of respondents in Generation Z indicated they had never had a credit card, whereas only 19 per cent of Millennials and 7.5 per cent of both Generation X and Baby Boomers could say the same.

Of those who have given up credit cards, Millennials and Baby Boomers were more likely to fear over accumulating debt as the reason they have given up the plastic.

The survey also found out how each generation uses the scheme and what they spend their money on.

Generation Z are the ones most likely to use the scheme for everyday things they need now, whereas Millennials are using it for luxury items, according to the survey.


Baby Boomers are using BNPL to help stagger their spending to manage their money more efficiently, while Gen X is an even split.

A significant number of people said the best thing they've bought with BNPL was a selfless purchase, such as birthday gifts for family or clothing for children.

People also revealed some of the luxury items purchased were their favourites, including high-quality investment clothing pieces.

Others purchased equipment for their home business, including product for a home salon, and there was even someone who bought equestrian gear.

The survey also revealed the way Kiwis use BNPL over credit cards:

• 50 per cent said they use BNPL to purchase luxury items they could not usually afford
• 47 per cent use BNPL to buy things they need now but could not otherwise afford
• 41 per cent use it to stagger spending
• 29 per cent use it to avoid increasing credit card debt
• 18 per cent use it to manage budget surprises

Laybuy is New Zealand's leading BNPL business. As a Kiwi start-up, father-and-son founders Alex and Gary Rohloff saw first-hand the need to give people more options and better ways to pay without the risk.

Since then, the business has continuously evolved and put consumers first, enabling them to get the things they love immediately and pay it over six weekly instalments, interest-free.

The survey results indicate the foundation of the business is still accurate two years later, with half of Laybuy users purchasing luxury items on BNPL and 41 per cent using it to stagger spending.

Laybuy managing director Gary Rohloff believes the results are a sign of the continuing rise of BNPL services.

"It's no surprise to us Kiwis are leading the charge in transforming the way we pay for goods and services. Although the buy now, pay later industry is still in its infancy, the recent decline in credit card growth shows New Zealand has an appetite for innovative ways to manage their finances." Rohloff said.

"Buy now, pay later is not just a passing fad, it's a rapidly growing industry that will continue to innovate and adapt as it sweeps the globe."