By Dr Nur Nadia Adjrina Kamarruddin
A RM1,200 purchase sounds expensive.
RM100 a month sounds manageable.
Yet they can describe exactly the same purchase. This seemingly simple difference says something interesting about the way we consume today. Increasingly, affordability is no longer understood only in terms of how much something costs. It is also about whether the payment can comfortably fit into our monthly budget.
The question is slowly shifting from “Can I afford this?” to “Can I afford the monthly payment?” There is an important difference between the two.
Instalment payments are certainly nothing new. Malaysians have long purchased homes, cars and other big-ticket items through financing. What has changed is how easily instalments have entered everyday consumption.
A phone can be paid monthly. So can furniture, electronics and household appliances. Credit cards offer instalment plans, while Buy Now, Pay Later (BNPL) has extended the same logic to many smaller purchases that might once have been paid for immediately.
The numbers show how quickly this form of payment has become part of Malaysian consumption. According to Bank Negara Malaysia (BNM), active BNPL accounts reached 7.5 million by the end of 2025, compared with 6.5 million just six months earlier. In the second half of 2025 alone, Malaysians made 140.3 million BNPL transactions worth RM11.9 billion.
But these figures need context.
Outstanding BNPL debt stood at RM4.9 billion at the end of 2025, representing only 0.3 per cent of Malaysia’s total household debt.
So, the issue is not that instalments or BNPL are inherently problematic.
For many consumers, they are useful.
A family that suddenly needs to replace a broken refrigerator may prefer to preserve cash rather than pay the entire amount immediately. Someone purchasing a laptop for work or education may find an instalment plan easier to accommodate within a monthly budget.
The more interesting question is what instalments do to our perception of price.
Consider that RM1,200 purchase again.
Seeing the full amount may immediately trigger questions. Do I really need it? Can I afford it? Should I wait? Is there a cheaper alternative?
Now present exactly the same product as: “Only RM100 per month”.
Nothing about the product has changed. Neither has its total price. But psychologically, the purchase may begin to feel different.
RM1,200 is a relatively large amount of money. RM100 can more easily be compared against this month’s salary or disposable income.
Suddenly, something expensive can feel manageable.
This creates what we might call an affordability illusion.
It does not mean the consumer cannot afford RM100. The issue is that RM100 can stop feeling like RM1,200.
And this becomes more complicated when it happens repeatedly.
Imagine committing RM80 a month for one purchase. Another RM120 for something else. Then RM65. Then another RM150.
Each decision, taken separately, may feel perfectly reasonable.
“I can afford RM80”, “I can manage RM120” or “RM65 isn’t much”.
But collectively, those four purchases have already committed RM415 of future monthly income.
Consumers tend to encounter purchasing decisions one at a time. Our finances experience them collectively.
Perhaps, then, the question should not simply be, “Can I afford another RM80 a month?” It should also be, “How much of my future income have I already committed?”
This matters because Malaysia’s household debt remains relatively high. BNM reported that household debt stood at 84.8% of GDP at the end of 2025.
That figure should not automatically be interpreted as evidence that Malaysian households are in financial distress. BNM continues to report generally sound household debt-servicing indicators.
But it does remind us that affordability is about more than whether a payment fits into this month’s budget.
There is another way to look at it.
Every instalment is, in some sense, a promise made by our future income.
Again, that is not necessarily a bad thing. Credit allows households to purchase homes, cars and other necessities without waiting years to accumulate the full amount in cash.
But the more monthly commitments we accumulate, the less flexible our future income becomes.
And life does not always follow the budget we planned at the beginning of the month.
A car needs repair. A child suddenly needs something. The electricity bill is higher than expected. Income changes. An emergency happens.
The instalment that looked small when we clicked “pay” remains there.
This is why the meaning of affordability deserves another look.
Malaysia has already begun strengthening consumer protection in this area. The Consumer Credit Act 2025 came into force in March 2026, establishing a more comprehensive framework for consumer credit. BNPL providers are among the credit businesses now subject to licensing requirements under the Consumer Credit Commission.
Regulation is important. It can encourage responsible lending, transparency and fair treatment of consumers.
But regulation cannot make every purchasing decision for us.
That still happens in the few seconds between seeing something we want and deciding whether we can afford it.
Perhaps consumers need to ask three questions instead of one.
Can I afford the monthly payment?
Can I afford the total price? And can I still afford all my commitments if something unexpected happens next month?
The first tells us whether the purchase fits into today’s budget. The other two tell us something much more important about whether we can actually afford it.
Modern payment systems have made purchasing easier, faster and more flexible. There is real value in that.
But convenience should not make the full price invisible.
A RM1,200 product does not become a RM100 product simply because the payment is divided across twelve months.
So perhaps the next time we see “Only RM99 per month”, we should mentally put the full price back together.
And then ask the original question.
Not: “Can I manage RM99?” But: “Can I afford what I am buying?”
Because being able to afford the instalment and being able to afford the purchase are not always the same thing.
The author is a senior lecturer at the School of Business Management, Universiti Utara Malaysia.
