AfterPay and other Buy Now Pay Later Schemes: you either love them or you hate them. Some people love the convenience. They like not having to pay upfront. They can buy what they want, even if they can’t afford it right then and there.
Other people (like me) are not impressed with these schemes. They prey on those who have low financial literacy. They know that customers will spend more money this way. They realise that businesses are slugged with fees but miss out on potential customers if they don’t offer it.
Buy Now Pay Later schemes appeal to people because it seems really easy. It makes the amount to pay seem small. It gives people a false sense of security. It entices customers to buy now and not worry about how they will pay for it. After all, it’s only four easy payments and you don’t have to worry about it now.
The trouble with AfterPay and BNPL schemes, is that they give you the product before you have paid for it in full. This is different to LayBy where you had to pay off the item first. There was something to work towards. There was a feeling of satisfaction and pride when you handed over the last payment, in exchange for the item.
With AfterPay, there is no incentive to pay it back (though of course, you have to). By the time you’ve made the last payment eight weeks after, the excitement has worn off. You’ve worn the new shoes or outfit. It’s old news.
Making regular repayments to AfterPay can affect your credit score and ability to borrow money. It can even impact your ability to get a bank loan. It can be dangerous for your wallet and your future.
For many people, they don’t have just one Buy Now Pay Later account. They have multiple accounts and then make multiple purchases. I can’t imagine the stress of having constant direct debits taken out of my bank.
Here is a poem dedicated to the ever growing, ever dodgy, Buy Now Pay Later schemes.
Buy now and pay later
might look quite harmless,
it’s only four payments,
it’s not an excess.
It appears so simple,
nothing upfront to pay,
just click here to sign up,
it’s an easy, carefree way.
But stop! Buyer beware!
Don’t get suckered in,
small amounts add up,
it’s not a financial win.
Those who designed them
are quite sneaky, you see.
No charge (if you pay on time),
the business gets a fee.
Once you buy a few items
it’s hard to keep track,
your pay comes in and then straight out,
and the debits start to stack.
Research shows that you’ll sign up
to more than one just scheme
trying to keep on top of these
can be impossible, it seems.
Once you’ve got your purchase,
and the shine has come off a bit,
it’s no longer as exciting,
yet you have to still pay for it.
AfterPay and the like
can affect your credit rating,
it robs from you your options
and financial future it starts taking.
So do yourself a favour,
avoid these like Covid.
Save up to buy what you want-
you’ll be really glad you did.
What Do You Think?
When I posted this on Instagram, I had a lady get really defensive. She was angry that I would suggest that AfterPay was a bad thing. She remarked that it has it’s place.
I disagreed. We went back and forth. We weren’t going to see eye to eye.
What about you? Do you think AfterPay and other Buy Now Pay Later schemes are dodgy or do you think they have their place?
Do you use them?
I’d love to hear what you think. Comment below or connect on Instagram or Facebook.
Melanie Wegener
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