Afterpay is a digital service that makes it possible to buy something now and pay it off in fortnightly instalments. Unlike layby, you’ll get the product right away, whether you’re shopping online or in-store. And in the best of scenarios you’ll pay nothing more.
The checkout method is quickly gaining popularity in Australia. As of February 2018, it’s been used by more than 1.5 million customers to buy approximately a billion dollars worth of stuff from 12,000 merchants.
Afterpay doesn’t perform a credit check when you sign up. This makes it different to other forms of credit as there’s no check to see if it suits your needs.
It also differs by not charging interest. If you meet all of the repayments, there’s no additional costs. This makes it more attractive than payday loans.
What’s the most expensive purchase I can make using Afterpay?
The limits applied by Afterpay slowly increase – once you’ve established a credible track record – to a maximum of $1500.
The service appeals to a young demographic. The first half 2018 financials claim people aged between 18 to 34 make up 67% of Afterpay’s customer base.
What does this mean for payment cancellations and refunds?
Paying with Afterpay can complicate the relationship you have with a retailer; now there’s a third party mediating between you and them.
Afterpay’s involvement in a sale dissolves after 120 days, once all repayments have been made, but matters can turn complicated if there’s a dispute within that time. Asking for a refund within 120 days of buying a product will see the retailer reimburse Afterpay first, which in turn refunds the money back to you.
Now Having said all that, you need to become A Responsible User
The responsible use of credit cards involves us being in control of our lives. For many ‘retail therapy’ is an escape from the reality of what is actually happening in their day to day circumstances. To be a responsible Credit Card user there are several things we must consider:
- Never spend more than we can really afford! It seems fairly obvious to the thinking person, however the temptation is always lurking there to use our Credit Cards for things we think we can’t do without.
- If we do need to use our Credit Card for large ticket items then do not use them again until we have completely eliminated the negative balance from that Card.
- Ideally each month pay the entire balance outstanding, and at the very least pay more than the minimum payment amount (and hopefully do not spend any more until our Credit Card is again debt free).
- If we are using our Credit Card for everything i.e groceries, utility bills, daily expenses etc as a means of tracking our expenditure then set up an automatic payment system with our bank so that the balance is paid out each month within the interest free timeframe.
- When we are going browsing – don’t take our card so that we aren’t tempted to spend on unnecessary items. Our wallets can actually get along without our Credit Card (can we?).
- If all else fails – freeze your Credit! Yes literally fill a large container with water, place your Credit Card in a sealable plastic bag and suspend it in the water, now place the container in the bottom of your freezer and leave in place until completely frozen. At the very least this will make you have some “thinking time” before you are able to use your card.
Credit Cards are a good thing when used wisely. If we find ourselves in debt over our heads seek professional help. It is not a sign of weakness to ask for assistance in managing our finances, in fact it is quite the opposite. Many people have discovered release from crippling debt by taking the step and finding someone who will help them.