What You Should Know About ‘Buy Now, Pay Later’ Services
In an increasingly digitised world, shopping has become much more convenient with the introduction of ‘Buy Now, Pay Later’ services such as AfterPay, zipPay and OxiPay. Buy now pay later services are typically offered by online stores as a payment option to buy a product immediately, but delay your actual payment. It is then paid off in instalments over a certain period of time.
However, many people fall into the trap of overcommitting financially and buying items that are much more expensive than they’d usually purchase. With the holiday season over, you should review your finances to see what shape you are in. If you are concerned about the level of debt, Debt Free Australia offers a free debt assessment.
You still have to pay for your purchase
Buy now pay later is a behavioral technique that can trick you into believing that you are paying less than the actual amount for your purchase. Psychologically, paying smaller amounts can make you believe that the item is actually cheaper than it is. As such, consumers may buy and spend more than they normally would, and falling into the trap of overcommitting financially and finding themselves in debt.
Interest-free doesn’t mean ‘free of fees’
Despite often being advertised as ‘interest free’, if you don’t make your repayments on time, the fees can accumulate to large sums. There are typically monthly account-keeping fees charged so that you can use this service, and then payment processing fees that may occur for each transaction, on top of your set repayment. Furthermore, if you miss a payment, you can be charged late fees. It all adds up incrementally and can become very overwhelming.
If you would like to learn more about your options to deal with unmanageable debt, contact our friendly and professional debt advisors at Debt Free Australia for a FREE debt assessment. Call us on our 24/7 debt advice line on 1800 676 598.