BLOG – Afterpay. Helping, Hindering, their $110million pay day and my new PJ’s (1 minute read + FREE gift)

“Afterpay founders boost wealth by $110million each after shares surge” were the news headlines. Afterpay reported a sharp jump in sales last week as a growing number of retailers and consumers signed up to the ‘Buy Now, Pay Later’ service.

It’s a simple concept. Customers pay the merchant back in fortnightly instalments and are charged fees for late payments. Afterpay isn’t regulated by consumer credit laws and doesn’t need to comply with responsible lending obligations that apply to banks.

I’m often asked by TV and radio to comment on Afterpay, a service used by 10% of Aussies, so last Saturday I decided to give it a go.

My journey into ‘Buy Now, Pay Later’ consumerism started badly. I have an iPhone 4. It’s no longer compatible with apps. Fortunately for me the sales assistant at ‘Bras N Things’ said I could use her iPhone8 to ‘join up’. Which I did. (I’ve since changed my email, password and card details!).

It makes things affordable for me” the shop assistant said.

It took less than 2 minutes for me to enter my email address, credit card details, Medicare card number and drivers licence details. I was greeted with a ‘You have $400 to spend instore’ message and a first payment bar code.

I wouldn’t be lying if I said the sales assistant was disappointed. The previous customer had had $1,400 to spend in-store. ”The more you spend, the more credit you receive” she said.

A mere scan of the bar code and an $80 pair of pyjamas were mine.

Panic struck me. I. Was. Now. In. Debt. So I did what any good Underspender would do – I hit the ‘Pay Now’ buttons and paid off all 3 remaining instalments.

So, is Afterpay a help or a hindrance? I’ll let you decide because everyone’s circumstances and financial obligations are different. This is what I learnt.

  • It’s very easy – perhaps deceptively too easy – to use.
  • We can buy things we don’t really want – and certainly don’t need – right away, not later, regardless of whether or not we can afford them.
  • It encourages impulse spending. Impulse shopping leaves us in debt and with items we can’t realistically afford. If I had $80 cash in my purse in 8 weeks’ time would I still spend $80 on PJ’s? Of course not.

As for the PJ’s, well they’ll be heading back to the store, once I’ve read the Afterpay refund policy!

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Until next week…