Buy Now Pay Later cards are a popular payment method in Australia, allowing consumers to pay for products over time rather than up-front. With BNPL cards, individuals can enjoy buying goods or services they otherwise would struggle to afford. Of course, there are potential risks with taking out BNPL cards, which we’ll discuss in this article.
Let’s get to the following commonly asked questions:
Buy Now Pay Later (BNPL) cards are a payment method allowing consumers to make purchases using instalment plans, paying in fortnightly or monthly repayments or choosing a pay later option. You can use BNPL cards online or in-store rather than a debit or credit card, allowing you to split larger purchases into flexible repayments such as fortnightly instalments.
There are plenty of BNPL providers in Australia, with some offering instant approval. Of course, each pay-later platform will have different terms and conditions, including a spending limit and minimum monthly repayment amount.
Here are the three most popular BNPL providers in Australia.
Afterpay is a popular Buy Now Pay Later (BNPL) platform based in Australia. It’s a digital payment platform that allows consumers to purchase from online and in-store retailers and pay for them in fortnightly repayments.
Like all Buy Now Pay Later providers, missing your monthly instalment will result in a late payment fee. Afterpay charges a late fee of just $6, lower than other BNPL services. However, if you make a larger purchase, you’ll be charged 25% of the outstanding balance of your order.
You can access Afterpay through its mobile app and website. Consumers can sign up for an Afterpay account on the customer login page, link it to their preferred payment method (usually debit cards), and use it for making purchases.
Zip Pay & Zip Money is a BNPL provider in Australia offering a more affordable way of paying for products or services. Zip allows you to spread the cost of your purchases over tie with a weekly, fortnightly, or monthly repayment schedule. Zip offers two main products: Zip Pay and Zip Money. Zip Pay is for smaller purchases, while Zip Money is for larger purchases.
With Zip, you can apply for a maximum credit of $1,000, paid back in interest-free installments. You’ll pay nothing up-front and set your own payment dates. Fees and charges do apply if there’s a missed payment, which can also affect your credit score.
Zip provides an online platform and a mobile app where customers can manage their accounts, view transactions, make payments, and track their repayments. You can link your credit card to Zip and set up a direct debit for your monthly instalments.
Humm is a Buy Now Pay Later (BNPL) Australian credit provider offering a flexible payment solution that allows consumers to make purchases and spread the cost over time.
The Little Things BNPL account is for smaller purchases with a maximum limit of a few hundred dollars, depending on credit checks. It allows customers to make weekly or fortnightly payments for up to 10 weeks.
The Big Things payment plans are for larger purchases, providing customers with an extended repayment period of up to 24 months, depending on the purchase amount. Payments can be made weekly or fortnightly. This will require an extensive credit check requirement.
There are many benefits to using a Buy Now Pay Later company, including flexible payments, interest-free options, and fast approval.
Here’s why you should use BNPL cards:
Like all credit products, there are risks involved with using BNPL cards. Here are the potential issues you should consider before applying:
Managing Buy Now Pay Later (BNPL) cards is essential to maintain a healthy financial situation. These cards offer a convenient way to make purchases and defer payment, but it's crucial to handle them responsibly.
Firstly, it's important to monitor your bank account regularly to ensure you have sufficient funds to cover the scheduled payments. Late fees can accumulate if payments are missed, potentially affecting your credit history. Keeping track of the outstanding balance and setting up automatic payments from your bank account can help avoid such fees and ensure timely repayments.
Additionally, it's important to be mindful of the credit provided by BNPL cards and not exceed your repayment capacity. Make sure to explore various payment options, such as weekly or fortnightly installments, to find a suitable arrangement for your financial situation. It's also advisable to familiarize yourself with any fees and charges associated with BNPL cards, such as interest rates or penalty fees, and factor them into your budget.
Lastly, considering the impact on other financial commitments, such as home loans, car loans, personal loans, business loans, and even contents insurance, is crucial to maintain overall financial stability.
BNPL cards offer convenience with flexible repayment plans, helping you to increase your buying power. Of course, you should be careful before creating a BNPL account — if you miss payments, you’ll face late payment fees, and it could affect your credit score.
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Disclaimer: The author is not a financial advisor and the information provided is general in nature and was prepared for information purposes only. This article should not be considered to constitute financial advice. Accordingly, reliance should not be placed on this article as the basis for making an investment, financial or other decision. This information does not take into account your investment objectives, particular needs or financial situation.