Humm Review (historical and for reference only)
Updated 10 October 2023
Important:
Our legacy guide:
We've put together a guide to Humm to explain how the payment method works, the benefits and pitfalls of using it, a comparison to credit cards and store cards, as well as essential 'must-know' facts and tips for using Humm effectively.
This Guide covers:
Know this first - understand the Humm late fees per purchase
If you don’t have sufficient funds to make a payment and you miss a repayment on the day its due, you will be charged:
- Effective 25 September 2022, humm has closed down
- Per the humm website, "any balances owing will continue to be debited from your funding source on the scheduled due dates until repaid in full (which may fall after 25 September). You can change your selected funding source if you prefer to use an alternative debit or credit card for your final payments".
- This guide present information for when humm was operating and we expect to delete it and re-direct the page at the end of 2022.
Our legacy guide:
We've put together a guide to Humm to explain how the payment method works, the benefits and pitfalls of using it, a comparison to credit cards and store cards, as well as essential 'must-know' facts and tips for using Humm effectively.
This Guide covers:
- How does Humm work, and where can I use it?
- Who is Humm for?
- Why do so many retailers offer Humm?
- Humm vs Credit Cards and Store Cards
- Humm - 10 Must Know Facts
- Tips for making the most out of Humm
- Conclusion
Know this first - understand the Humm late fees per purchase
If you don’t have sufficient funds to make a payment and you miss a repayment on the day its due, you will be charged:
- If you don’t have sufficient funds to make a payment and you miss a repayment on the day its due, you will be charged a $10 late payment fee.
- If you are past the due date by more than 7 days, your account may be passed to a Collections team where a $30 fee may be applied to your account.
How does Humm work, and where can I use it?
Retailers
Retailers are both in-store and online, with the majority being in the fashion industry. Examples include Farmers, Freedom Furniture, PB Tech and 500+ other retailers.
Retailers are both in-store and online, with the majority being in the fashion industry. Examples include Farmers, Freedom Furniture, PB Tech and 500+ other retailers.
Making a Purchase
Humm offers two ways to make a purchase:
2. Online:
Humm offers two ways to make a purchase:
- Instore using the Humm website:
- A customer signs up or signs in to their Humm account on their phone and clicks on SHOP INSTORE
- The customer provides their 6-digit code, and once validated, confirm their purchase details and clicks on CONFIRM
- The payment is charged to the customer.
2. Online:
- Participating retailers will indicate that they offer Humm on their website and the repayment amounts for your basket of items should you purchase them.
- Once you have decided on your purchase, you will be asked for pay 25% of the total value of the transaction or service upfront, and this can be paid by debit or credit card.
- You'll then be shown a repayment schedule, which requires three further 25% payments over six weeks, i.e. one every fortnight.
Repayments and Reminders
Humm only accepts Mastercard and Visa credit and debit cards, but these MUST have been issued by a New Zealand bank. Humm does not accept bank transfers, automatic payments or direct debits.
You can find the scheduled payment dates on the purchase confirmation email which is sent when an order is approved. If you don’t have the email, logging in to the Humm website will show the details.
Humm send a series of reminders so that you make sure there's money in your account for the direct debit to clear. With regular payments, there is a clear, set, standard and achievable endpoint – in another 6 weeks your purchases will be fully paid. Contrast this to a credit card which rolls over with a 2%-5% minimum repayment.
Payment will automatically be taken from your preferred card on the scheduled payment date, If this fails, a late fee will be applied (see below).
If you want to make a payment before the due date, you can do this manually via the website or app. You can make as many early repayments as you want, and if they are successful, the automatic payment will no longer be processed on the original scheduled date.
Humm only accepts Mastercard and Visa credit and debit cards, but these MUST have been issued by a New Zealand bank. Humm does not accept bank transfers, automatic payments or direct debits.
You can find the scheduled payment dates on the purchase confirmation email which is sent when an order is approved. If you don’t have the email, logging in to the Humm website will show the details.
Humm send a series of reminders so that you make sure there's money in your account for the direct debit to clear. With regular payments, there is a clear, set, standard and achievable endpoint – in another 6 weeks your purchases will be fully paid. Contrast this to a credit card which rolls over with a 2%-5% minimum repayment.
Payment will automatically be taken from your preferred card on the scheduled payment date, If this fails, a late fee will be applied (see below).
If you want to make a payment before the due date, you can do this manually via the website or app. You can make as many early repayments as you want, and if they are successful, the automatic payment will no longer be processed on the original scheduled date.
Late Fees and Outstanding Balance Penalties
If you don’t have sufficient funds to make a payment and you miss a repayment on the day its due, you will be charged a $10 late payment fee. If you are past the due date by more than 7 days, your account may be passed to a Collections team where a $30 fee may be applied to your account.
If you don’t have sufficient funds to make a payment and you miss a repayment on the day its due, you will be charged a $10 late payment fee. If you are past the due date by more than 7 days, your account may be passed to a Collections team where a $30 fee may be applied to your account.
Returns, Refunds and Repayment Adjustments
You have the same consumer rights to return items no matter how you paid for them. If you decide to return one item or the entire purchase, once the retailer has accepted your returns, your Humm payment plan is adjusted to reflect the new total order value. But it's important to know that repayment amounts may not change right away;
You have the same consumer rights to return items no matter how you paid for them. If you decide to return one item or the entire purchase, once the retailer has accepted your returns, your Humm payment plan is adjusted to reflect the new total order value. But it's important to know that repayment amounts may not change right away;
- If you have already made a payment or two, your repayment schedule will adjust accordingly.
- However, your fortnightly repayments won’t be reduced - instead, you may see the payment due next is still at full value, while the final payment(s) reduces to $0.
- If you were due a cash refund, as soon as the retailer accepts your return it can take up to 5-7 business days for the money to show up on your account (this depends on the processing time of your bank which credits the funds to your card).
You may be declined from making purchases at any time
Just because you have an Humm account doesn't mean you can buy whatever you want. We would expect that thousands of transactions are declined every week, which may be due to:
Just because you have an Humm account doesn't mean you can buy whatever you want. We would expect that thousands of transactions are declined every week, which may be due to:
- The purchase not being within the maximum purchase limit ($1,500)
- If the total of your instalment payment(s) will exceed $250 per fortnight
- The maximum amount of all Humm balances owing is more than $1,000
- The total sum of all Humm arrangements can’t exceed $1,000 at any one time, and you can’t have more than 5 active purchases.
- The card loaded to the Humm platform has expired.
- OR if you aren’t approved at the initial credit check.
​Who is Humm for?
We see Humm as an easy way for the non-financially minded to buy things without getting trapped in long-term credit card debt. However, a growing number of young people are adverse to credit cards and store finance, meaning Humm could provide an alternative short-term credit solution that doesn't aggressively leave customers in debt.
Take Michelle. She works part-time and studies at university. She has $500 in her bank account and is paid $200 a week by her employer. She buys $100 worth of clothes using Humm knowing she’ll pay $25 a fortnight for the next 6 weeks after she makes an initial $25 payment. She believes that the $75 balance owing will be more than covered by her weekly income over this time. She keeps the $475 in her bank account knowing she can make the $25 Humm repayments when she gets paid. There are many people like Michelle.
The attraction of Humm is the ease of paying off a purchase without incurring interest charges like a credit card would charge if you’re late.
We believe 'Millennials' make up the vast majority of Humm's customer base, and there is an increasing preference for these people to make repayments in installments rather than spend the entire balance upfront, or face an end-of-month bill from a credit card.
Take Michelle. She works part-time and studies at university. She has $500 in her bank account and is paid $200 a week by her employer. She buys $100 worth of clothes using Humm knowing she’ll pay $25 a fortnight for the next 6 weeks after she makes an initial $25 payment. She believes that the $75 balance owing will be more than covered by her weekly income over this time. She keeps the $475 in her bank account knowing she can make the $25 Humm repayments when she gets paid. There are many people like Michelle.
The attraction of Humm is the ease of paying off a purchase without incurring interest charges like a credit card would charge if you’re late.
We believe 'Millennials' make up the vast majority of Humm's customer base, and there is an increasing preference for these people to make repayments in installments rather than spend the entire balance upfront, or face an end-of-month bill from a credit card.
​Why do so many retailers offer Humm?
Retailers like Humm for many reasons.
Humm has many customers who base their purchasing decision on the smaller repayment number, not the upfront cost. This perhaps is a new way of looking at shopping, and one that Humm (and its pay-by-installment rivals) dominates over conventional payment options.
- Firstly, for online shopping, retailers offering Humm see fewer customers abandoning their cart at the checkout because once the upfront instalment is paid the remainder of the transaction can be spread over 6 weeks which makes it more affordable.
- Secondly, shops and online retailers already have to pay credit card companies a fee of a purchase. Like a credit card company, Humm charges retailers to offer their service (we estimate this to be between 4% and 10%) as they cover the cost of purchase. The benefits of Humm for a retailer is that it brings a new group of people who may otherwise not be willing or able to make a purchase.
- Thirdly, there is a theory that with Humm offering a no-interest-ever payment plan, retailers will attract more customers and increased turnover will subsidise the Humm fee.
Humm has many customers who base their purchasing decision on the smaller repayment number, not the upfront cost. This perhaps is a new way of looking at shopping, and one that Humm (and its pay-by-installment rivals) dominates over conventional payment options.
Humm vs Credit Cards and Store Cards
Credit cards, store cards and long-term finance cards are designed to build up debt. Our guide to how credit cards work explains the mechanics in more detail. Compared to cards, there is a lower chance of building up debt with Humm.
Many people get into trouble with a credit card because it’s more difficult to keep track of purchases. Because credit cards are accepted nearly everywhere, they can easily be used for coffees, a night out, an indulgent purchase alongside routine expenses. Humm instead forces shoppers to understand the fortnightly repayment terms upfront, and a series of follow-ups (see below) train the customer to make on-time repayments.
Credit card and other long-term finance companies, on the other hand, make a lot of money when bills rollover as interest is charged which can compound leading to a debt problems. Furthermore, credit card minimum repayments range between 2-5% for a bill, whereas Humm requires 100% of the balance owed after the first instalment to be repaid after 6 weeks.
The use (or misuse) of credit cards and similar finance options have become so commonplace that a significant proportion of New Zealanders don’t pay their balances off after one month, and quickly incur interest. As long as you make the minimum monthly payment, the card-issuer won’t complain. You can also re-spend the money you’ve just paid off. Humm, in contrast, requires you to apply to make a new purchase through its platform and sends you a series of reminders and follows up for repayment well before the balance is due.
Humm isn't like other 'interest free' finance options such GEM Visa and Q Card, where such companies offer '0% interest and zero repayments' knowing that if you don’t make any voluntary repayments before the free interest period ends, you will be smashed with a lot of interest charges at the end.
How is Humm different from a credit card?
Many people get into trouble with a credit card because it’s more difficult to keep track of purchases. Because credit cards are accepted nearly everywhere, they can easily be used for coffees, a night out, an indulgent purchase alongside routine expenses. Humm instead forces shoppers to understand the fortnightly repayment terms upfront, and a series of follow-ups (see below) train the customer to make on-time repayments.
Credit card and other long-term finance companies, on the other hand, make a lot of money when bills rollover as interest is charged which can compound leading to a debt problems. Furthermore, credit card minimum repayments range between 2-5% for a bill, whereas Humm requires 100% of the balance owed after the first instalment to be repaid after 6 weeks.
The use (or misuse) of credit cards and similar finance options have become so commonplace that a significant proportion of New Zealanders don’t pay their balances off after one month, and quickly incur interest. As long as you make the minimum monthly payment, the card-issuer won’t complain. You can also re-spend the money you’ve just paid off. Humm, in contrast, requires you to apply to make a new purchase through its platform and sends you a series of reminders and follows up for repayment well before the balance is due.
Humm isn't like other 'interest free' finance options such GEM Visa and Q Card, where such companies offer '0% interest and zero repayments' knowing that if you don’t make any voluntary repayments before the free interest period ends, you will be smashed with a lot of interest charges at the end.
How is Humm different from a credit card?
- The is no annual account fee when using Humm, whereas most credit cards charge a regular account fee
- An Humm purchase doesn’t charge interest
- You have 8 weeks to repay but you'll need to make regular fortnightly payments of 25% of the purchase price over 6 weeks, as well as pay 25% of the purchase upfront. Credit cards can offer up to 45 to 55 days of interest-free terms on new purchases, with the balance due in full at the end of the 45/55 days.
- Humm does not cap its fees; a $10 late payment fee is charged if the customer doesn’t pay on the scheduled payment date/s when instalments are due, whereas a credit card will charge you 15%-30% interest per year and this can be for as long as it takes you to pay it off.
- Humm can be approved instantly, but you will be credit checked at the time of your first transaction whereas with a credit card you’ll need to apply, be credit checked and then wait for approval which can take weeks.
- You can use a credit card as long as you have the available balance, whereas Humm purchases may be declined based on a number of factors (for example, the purchase not being within the maximum purchase limit of $1,500, the total of your instalment payment(s) will exceed $250 per fortnight, the maximum amount of all Humm balances owing is more than $1,000 as the total sum of all Humm arrangements can’t exceed $1,000 at any one time, and you can’t have more than 5 active purchases, the card loaded to the Humm platform has expired or if you aren’t approved at the initial credit check).
Humm - 10 Must Know Facts
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Humm can be approved instantly, whereas credit card applications can take weeksHumm gives applicants the option of being instantly approved with a maximum of $1,500 purchase limit. Contrasted to a credit card application where you have to apply, wait for it to be assessed, wait for the credit card to be issued and delivered etc., Humm is relatively near-instant.
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Humm isn’t accepted everywhere, so it's not like a credit cardHumm is limited to some 500 retailers, many of which are in fashion, beauty and salon services. As a result, Humm isn’t an alternative to EFTPOS or credit cards. Instead, it acts as a payment method if you are shopping for specific items.
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​You won’t be able to build a positive credit history if you use HummUnlike credit cards, Humm doesn’t supply evidence of good repayment behaviour to credit rating agencies for credit scoring. However, their fine print is clear in that they do reserve the right to perform credit checks and to report negative activity on your account to credit rating agencies. So if you do miss a payment, not only will be charged a fee but you may have this noted in your credit history. If you are a good payer and never miss a payment, your credit history won’t mention this so applying for other credit may be more difficult without such evidence of previous repayments.
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​Many retailers are aimed at young womenHumm is usually offered as a payment option for retailers selling clothing, makeup, décor. There is a risk that the biggest users will be consumerist people chasing the ‘latest’ stuff. Impulse buying could lead users to over-extend themselves, so proper money management is essential.
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​The more purchases you make, the more repayments you’ll need to manageYou could get into financial strife by having too many repayments at once. This will arise if you’ve made multiple purchases with different shops that overlap, meaning repayments will come out of your bank account continually. You will need to be able to plan your repayments and manage your money – miss one, and you’ll be charged a late fee, but you’ll also need to make sure you can meet all the other payment. Financial planning is essential for anyone regularly using Humm.
The total sum of all your Humm arrangements can’t exceed $1,000 at any one time, and you can’t have more than five active purchases. This means your purchases can’t exceed repayment of $250 a fortnight. |
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​You’ll never be charged interest – if you’re late in paying, you’ll be charged feesHumm is not legally allowed to charge interest. They make money from your purchase by charging the merchant a fee for using the service, as well as late fees for anyone who doesn’t make a repayment on time.
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​Retailers are not allowed to charge you more if you use HummA retailer is not permitted to charge an ‘Humm service fee’ or similar. Humm is merely a payment option, and does not permit partners to offer an 'Humm price' that is more than what anyone else would pay the retailer.
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Humm isn’t really like traditional layby – you pay AFTER you’ve bought itThere is some confusion among New Zealanders that Humm offers a layby service, where you pay instalments in advance of receiving the goods or services. Humm is the reverse of traditional layby - you pay 25% upfront and the remaining 75% over three fortnights.
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Making Humm repayments with a credit card can lead to debt problemsThe problem with using a credit card to make repayments is that the original debt isn't paid off - it's just transferred. If you can't pay it off by the end of the month, interest will be charged. Anyone regularly using a debit card to make Humm repayments will avoid credit card debt for Humm purchases and the high interest rates that usually go with it.
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There is a chance you’ll be direct-marketed based on your purchase historyHumm knows precisely what item you purchased, where a credit card does not. As a result, there is potential that Humm and/or related retailers will direct market to you. They aim to sell, and they can only do that if you buy.
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​Tips for making the most out of Humm
Your success with Humm will depend on how you use it. Just because you are approved for a purchase doesn't mean you will always have the money to make the repayments. If you decide to use Humm, here are some helpful tips to keep things under control:
1. Plan your purchase day - make purchases on your payday or 1-2 days after payday when you know money regularly comes into your bank account. This way you won’t be caught out with ‘insufficient funds’ and will always avoid any late fees. Repayments occur exactly every two weeks after purchase date - it's less difficult and budget when you have 1 to 2 repayment days than 8 to 14.
2. Shop around for the best price on an item – don’t assume that an Humm retailer offers the lowest price. Compare retailers to get the best deal. If the retailer you pick already has the lowest price you can find, and they offer Humm, it’s likely to be the best option.
3. Make sure you know you will be able to make the repayments – because Humm takes direct debits, not budgeting could mean your bank account is cleaned out leaving no money for regular bills and food.
4. Have some 'rainy day' money set aside - Humm won't work if you currently need to pay for a big purchase and don't have another means of credit. If possible, set aside a sum of money that could pay for a $500 or $1,000 purchase. If something unexpected comes up and you find yourself short of money due to any reason, your Humm commitments may be compromised.
5. Use a debit card for making repayments - using a debit card means you're repaying your purchases with money you have. If you use a credit card, this delays the actual repayment and you could end up paying interest on the items if you can't pay off your bill at the end of the month.
1. Plan your purchase day - make purchases on your payday or 1-2 days after payday when you know money regularly comes into your bank account. This way you won’t be caught out with ‘insufficient funds’ and will always avoid any late fees. Repayments occur exactly every two weeks after purchase date - it's less difficult and budget when you have 1 to 2 repayment days than 8 to 14.
2. Shop around for the best price on an item – don’t assume that an Humm retailer offers the lowest price. Compare retailers to get the best deal. If the retailer you pick already has the lowest price you can find, and they offer Humm, it’s likely to be the best option.
3. Make sure you know you will be able to make the repayments – because Humm takes direct debits, not budgeting could mean your bank account is cleaned out leaving no money for regular bills and food.
4. Have some 'rainy day' money set aside - Humm won't work if you currently need to pay for a big purchase and don't have another means of credit. If possible, set aside a sum of money that could pay for a $500 or $1,000 purchase. If something unexpected comes up and you find yourself short of money due to any reason, your Humm commitments may be compromised.
5. Use a debit card for making repayments - using a debit card means you're repaying your purchases with money you have. If you use a credit card, this delays the actual repayment and you could end up paying interest on the items if you can't pay off your bill at the end of the month.
Conclusion: Humm
- Humm is here to stay, and this means more and more retailers will offer the payment option.
- If you budget carefully, plan purchases and Humm continues to closely assess your credit risk, the payment option can work to your advantage.
- We encourage shopping around for a deal - just because one retailer offers Humm doesn't mean it's the overall best deal.
- Humm, like any payment method, gives shoppers full consumer rights - if you return items, you will receive a refund, although this may not processed on the same day.
- Humm is an excellent alternative to using a credit card for non-essential purchases. A credit card may seem easier and more flexible, but the billing process is less easy to manage. Humm approves you per-purchase, although overall responsibility to make the repayments falls on the customer.
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