Make 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. This method is quickly gaining popularity in Australia. It’s been used by more than 1.5 million customers to buy approximately a billion dollars’ worth of stuff.
Most of the purchases will be paid in fortnightly instalments. With Afterpay missing an instalment results in a $10 fee zipPay, any balance remaining at the end of each month attracts a $5 fee. These late fees may sound low, but they can be very high relative to the value of your purchases – far higher in fact, than interest on a credit card.and, if you fail to make the repayment within a week, another $7 fee will be charged. Missing all of the repayments on a pair of $100 jeans then has the potential to put you back an additional $68.
Importantly they don’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 are no additional costs. This makes it more attractive than payday loans.
CCLSWA think it’s financially better to save up for a purchase to make sure you can afford it. The whole ‘buy now pay later’ industry is facing a Senate inquiry due to the fact it essentially exploits a legal loophole and was not covered in the Hayne Royal Commission. At CCLSWA we are wary of these products as they don’t comply with credit laws and as such, they are not regulated. We fear people facing future debt issues because of them.
(Above taken from CCLSWA information page)