humm: What is humm and how does it work

humm: What is it and how does it work | RateCity

humm is a buy now, pay later (BNPL) platform that allows you to make purchases up to $30,000 and pay for them in interest-free instalments over a few months. Unlike the more popular BNPL platform, Afterpay, which generally allows you to spend a maximum of $1,500 per transaction, humm covers a more extensive range of payments through its two services – 'Little things' for purchases up to $2,000 and 'Big things' for more expensive purchases up to $30,000.

Apart from your day-to-day spending, humm can be a useful option for breaking down big-ticket purchases into easily manageable instalments without paying any interest if you can keep up with the repayment schedule. 

Interestingly, it’s possible to use humm to pay for your dental treatments or even cover the cost of installing solar panels in your home. humm is also accepted at some fertility clinics to pay for IVF through interest-free instalments.

Disclaimer

This article is over two years old, last updated on June 4, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent bnpl articles.

How does humm work?

humm caters to the requirements of a broad range of users by offering two payment wallets within a single service. You get access to the smaller of the two wallets (‘Little things’) as soon as you sign up on humm and are approved to use the platform. 

You can use your ‘Little things’ wallet to buy as many items as you like up to your approved spending limit. The maximum amount you can spend on your ‘Little things’ wallet is $2,000. However, you may be approved for a smaller amount when you sign up, depending on the background information you provide at the time of joining the platform. 

Once you start using the platform, you may find your spending limit increase, as you build a good repayment history or provide further evidence to humm in the form of your payslips and bank statements to show you can manage larger repayments than those you have previously been approved for.

You can use your ‘Little things’ wallet for making payments (both online and in-store) at merchants that accept humm as a form of payment. Repayment for ‘Little things’ can be spread across five fortnightly or 10 weekly repayments. 

If you are looking at covering a bigger expense, you need to apply online or in-store to use the ‘Big things’ wallet. It's possible to get pre-approved for a spending limit of $5,000 on your ‘Big things’ wallet online or using the humm app. 

If you need to spend more, however, you'll have to apply in-store. Repayments for ‘Big things’ can be made over six, 12, 24, or even 60 months, without paying any interest.

Joining humm is pretty straightforward. To sign up, you must be:

  • At least 18-years old.
  • An Australian citizen or permanent resident.
  • Working actively (over 25 hours a week) or receiving an aged or veteran's pension for using 'Big things'.

Once you download the app and sign up, you'll go through an approval process where you'll be required to submit your ID documents, employment details and bank details. For larger expenses or 'Big things', humm may check your personal expenses before approving a particular transaction.

Where can you use humm?

You can use humm to make online or offline payments in over 20,000 stores across categories including homewares, fashion and accessories, jewellery, health, appliances, and travel. Going through the list of retailers, you'll find you can use humm to buy everyday goods, pay for medical and dental services, cover your pet's veterinary costs and even purchase solar panels and blinds for your home.

humm also includes an option to pay your bills using BPAY. You can use humm to pay off bills between $20 and $2,000 in five fortnightly instalments. Bills over $80 can be stretched across five months, but you’ll be required to pay a monthly fee of $8. 

Are there any fees or charges I should be aware of?

humm doesn't charge any monthly fees for purchases under $2,000 paid over five fortnights. However, an $8 monthly fee applies if you pay off these purchases over 10 fortnights. Additionally, a late payment fee of $6 applies to purchases less than or equal to $65.

For Little Things purchases greater than $65, humm’s late fees are capped at 18 percent of the purchase price or $48, whichever is lower. The maximum late fee you may be charged on your Big Things purchases is capped at 18 percent of the purchase or up to $78, whichever is lower.

A monthly fee of $8 applies to all the ‘Big things’ purchased via humm. There's also an establishment fee of between $35-90 for larger purchases, depending on the price of the item you buy. If you have used humm before, you'll pay a repeat purchase fee of $22 on ‘Big things’ instead of the establishment fee.

It’s worth noting that even though humm charges no interest on your repayments, it does levy different types of fees that can add to your costs significantly. For instance, a shopping spree worth $15,000 spread across a term of 50 months will see you pay a total of $400 in monthly fees. Add to this the maximum establishment fee of $90 for a new user, and your additional costs come to $490, which is equal to 3.27 per cent of your original spend.

The good thing about humm is that it is completely transparent about the fees it charges its users. There's a handy calculator on the site that explains your options, allowing you the freedom of choosing a repayment plan that works for you. humm also claims to notify its users three business days before a scheduled payment to ensure they have adequate time to put money in their linked account to avoid being hit by late payment fees

Will using humm affect my credit score?

Even though humm states that it may look at your credit score while assessing your application, the website says that simply applying for humm isn't going to affect your credit score or leave a record on your credit file. 

However, it's important to know that your credit score may be affected in other ways when you use humm, or any other BNPL service for that matter. 

BNPL platforms are not regulated by the same consumer protections as other credit providers because they don't charge you any interest and don't fall under the National Credit Act. Therefore, platforms like humm are not obliged to carry out full background and credit checks, which means you may qualify for a purchase you cannot afford to repay. 

Even though most BNPL platforms, including humm, will not allow you to make further purchases if you default even once, it's easy to sign up for multiple BNPL platforms and push yourself into a vortex of debt, made worse by the late payment fees charged by these platforms. 

Additionally, humm and other BNPL platforms may report any late payments or defaults to credit reporting agencies, much like your credit card providers, which is going to hurt your credit score.

Is it a good idea to use humm?

humm offers users a convenient way to pay for day-to-day expenses and important things like medical treatments through easily manageable instalments without charging any interest. However, it's worth remembering that any BNPL service is still a form of credit and must be used responsibly in order to avoid any negative impact on your financial health and credit score.

When planned properly, a humm account can be a helpful tool for managing your expenses without using a credit card. However, if you have had trouble spending on a budget or lagged on your repayments in the past, it may be better for you to rely on your savings to purchase what you need.

If you are using humm and find yourself in a challenging situation, you can contact the BNPL provider to discuss reducing your repayments or find another way to overcome the problem under their financial hardship assistance plan.

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Product database updated 23 Dec, 2024
Fact Checked

This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.

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