While getting your item sooner might seem like a good thing, there's a few things to keep in mind.
How it worksIt's the modern day lay-by, but you get to collect the order before you pay it off. You don’t pay extra when you make your payments on time, and the platform boasts a quick and easy approval process. You need to be at least 18 years old and able to enter into a legally binding contract.
What you need to know
Fees and charges can apply : miss a payment and you’ll be charged a late payment fee of $10. If you still can’t pay within seven days you’ll be charged an additional $7. They’ll also stop you from making further purchases until your debt is paid.
You shouldn’t always rely on it: the service uses an algorithm to work out how much credit they will provide you with based on the information provided in your application. Just because you have used Afterpay before doesn’t mean they’ll approve your purchase again, so it’s good to still have some money saved just in case.
Impulse buying isn’t always smart: when you save up for something you’re effectively taking a cooling-off period that allows you to consider how much you really want (or need) an item. It also gives you time to shop around, check prices and read reviews. If you’re already prone to impulse buying using an after pay service could be a dangerous way to splurge.
Use it responsibility: self-control is a must if you’re going to utilise these services. As these schemes are relatively new, they aren’t yet highly regulated. The credit provider doesn’t have an obligation to check that you can actually afford to make repayments before they lend you the money. If you don’t pay it back on time your items could cost you a whole lot more than the original price.
Not all merchants offer it: while literally hundreds of retailers now allow you to use Afterpay not all stores have caught up. Most major retailers including Myer, Jetstar, Typo and more are on-board but others still rely on the traditional pay before you play model.
Our tips to stay in control
• set payment reminders to avoid late fees
• stick to a budget and don’t spend more than you can afford
• link a debit card instead of credit card to your account to limit spending
Saving up for a big purchase?
There are some great apps out there that can help you budget. Check out our article on some of the best budgeting apps out there.