"A trap, a massive trap": how Helen closed the BNPL that began with Christmas presents

Helen got a divorce just before Christmas, about five years ago. "I had no money, I had no money whatsoever to buy Christmas presents for my kids or anything," she says. "I had an Afterpay account…to get gifts and stuff for them." Afterpay then became a regular part of her daily life building up her debt. "I fell into the trap of, oh, you know, buying more crap."

Helen is a 50-year-old single mum of two adult children in Melbourne's south-east. Her divorce left her starting from scratch. "Obviously he was the breadwinner of the family. So when we separated, I really had no idea how I was going to cope financially, how I was gonna live, really. But I did it and I'm doing it. I'm really proud of that".

The conference in Sydney that changed her outlook

For years, the debt itself was something she preferred not to look at. "I just sort of swept it under the carpet," she says. "Or I just didn't know how I was going to navigate that, how I was going to try and get myself ahead."

Then she went to Sydney for a work conference. One of the speakers was Molly Benjamin, founder of the Ladies Finance Club.

"Something sort of clicked in me and I was just like, oh my God. Everything she's saying, it was really hitting home," Helen says. "It sort of started me thinking, okay, I've got to do better. Try and start trying to invest some money, even if it's a little bit of money a week. Try to make some extra contributions to my super fund."

Benjamin suggested budgeting apps, and WeMoney was one she named. "This is a good free budgeting app, because obviously not all budgeting apps are free," is how Helen remembers it. "So that's why I got onto WeMoney."

Getting her loan with WeMoney

Her debts at that point: a personal loan of about $28,000 with Commonwealth bank, costing $400 a fortnight and a credit card taking about $170 a month. Her Afterpay instalments were coming off the credit card.

After about a week in the app, a refinancing option came up, presented as the best solution for her. "I just went on to it and had a look at what the interest rates were, and I was like, oh my God, that's so much better than what Commonwealth was offering me."

She applied with the lender at the top of the list, and the app's framing was what got her over the line. "I think that's what made me choose. I would have never probably gone outside of that WeMoney app and gone to that lender if it wasn't for WeMoney."

The new loan is $36,000, because she rolled her credit card balance into it, and the repayment is $356 a fortnight. That single payment replaced the $400 loan repayment and the credit card payments on top of it. "There's no monthly fees. The interest rate is like almost blinking 10 per cent cheaper. That was really a no brainer."

The application itself "was very basic, in fact. They were like, yep, all good. I signed the thing and it was done."

Finally getting rid of Afterpay

The first thing she did after consolidating was to get rid of her Afterpay. "I was like, right, that's it, I'm going to get rid of that," she says. "I paid those all off and then I just closed it. I don't have to worry about that every fortnight, all those payments coming out. I have so much more money now every fortnight because I don't have to pay any Afterpay."

Her gripe with Afterpay comes from how easy it is to overspend. "It's fun at the time. Oh, I want that pair of shoes. Oh, I don't have any money for that pair of shoes. Oh, easy peasy, easy peasy. You don't have to pay anything until the next fortnight, and then all this money starts coming out and it's like, oh my God, I should have just waited till I could afford the shoe."

Her biggest goal hasn't shifted "I would love nothing more than to have my own home." But three months on, she says she's closer than she was. "I feel like I'm in a better financial position even, you know, three months after. Because I have started investing a little bit of money in shares, and I have consolidated my debt and got a better interest rate, and I don't have the credit card debt and I don't have Afterpay."

See what one repayment could look like for you

If your repayments are scattered and it feels like the balance never moves, it can help to see the numbers in one place. Try the WeMoney debt consolidation calculator for an estimate of what a single repayment could look like, then create a free WeMoney account to get a view based on your actual situation.

Disclaimer: Helen’s experience is her own and is not a guarantee of a similar result. The information in this article is general in nature and was prepared for information purposes only. It should not be considered financial advice and does not take into account your objectives, financial situation or needs. Consider whether it is appropriate for your circumstances and seek independent advice before making a financial decision.