Buy Now, Pay Later: Is it worth it?

‘Buy Now, Pay Later’ isn’t a new concept. For years, customers have been able to buy goods with finance. However, new players like AfterPay and ZipPay have the air of something trendier. They are also vastly more accessible and available through endless retailers. When you’re scrolling ASOS on a lazy Sunday afternoon, AfterPay is there, a waiting temptation. How simple does 4 fortnightly payments sound?

But are these services good to be true? Will buy now, pay later ever work out?

So much of the answer to these questions depends on your own circumstances. ‘Buy Now, Pay Later’ isn’t necessarily something that should be abandoned completely, just used with caution and intention. It’s important to remember that some of these services don’t do thorough credit and income checks.

There are a few key questions you can ask yourself before using a financing service like AfterPay or ZipPay.

Have I read the fine print?

Now the fine print can be exhausting, I know. However, it is very important to know what you’re signing up for. After all, you’re agreeing to a contract between yourself and the service provider.

• Are there fees?
• How much are they?
• Are there late fees if the money can’t be drawn from your account?
• Can you pay additional amounts voluntarily?

Not knowing your obligations can land you in hot water, with fees you can’t pay and a negative impact on your credit score. Checking these details early can save you a lot of trouble!

Am I buying something impulsively?

Buy Now, Pay Later services make it all too easy to spend impulsively when you really don’t have the money to.

If you had $100 sitting in front of you right now, would you buy that linen dress? If the answer is probably not, you probably shouldn’t AfterPay it. This goes for any item – would you buy it if you had to pay upfront?

You should also consider the reason why you want the item in question – is it because your old shoes are falling apart, or because you’re trying to cheer yourself up?

You’ll save money and reduce waste if you cut back on mindless spending. Try to stick to items you need, items that are good quality and items that are actually within your budget. This can be good to keep in mind while shopping, whether you’re using finance or not.

Will I actually have the money when the payments are due?

Maybe you’ve got 1/4 of the total cost right now, but what about next fortnight, and the one after that? What does your income look like over the next 8 weeks? Are there any bills due in that time? Have you taken any account-keeping fees into consideration?

Not being able to make the repayments will not only be stressful, but it can also negatively impact your credit score and drive you into debt. Those late fees can be steep!

Buy Now, Pay Later can be a great option if you’re aware of your obligations, will have the money for repayments and would have bought the item in question anyway. Spend wisely, folks!

If you have found yourself in debt, you’re not alone.

Help is available through the National Debt Helpline – they offer free financial counselling to help you get back on track.

For more generalised tips about finance, check out MoneySmart.gov.au. For support while studying at UNE, contact us at advocacy@une.edu.au or (02) 6773 3116.