If you’ve ever seen ‘buy now, pay later’ in a small card tucked near the card terminal, then you’ve probably seen Afterpay or Zippay.
They are considered as ‘buy now, pay later’ apps or BNPL for short. They offer the chance for us to get our item straight away, and deal with payments later.
For us international students, it sounds attractive, with our limited student allowance/salary, buying now and paying later means that buying a new jacket doesn’t mean we have to settle for Indomie for the rest of the month.
But, will using them cost us, or save us? Here’s a quick guide for you on buy now, pay later apps.
What are they?
Buy Now, Pay Later allows you to get what you want straight away, while paying the price in small upcoming payments. Depending on which BNPL you use, the frequency of payment will be different.
Afterpay, the most popular BNPL app lets you split the total cost of your purchase by four, which you can pay every fortnight. You’ll pay the first quarter when you buy at the start, so that means you can pay the rest over one and a half months.
Other apps can offer differenother payment options, for example Zippay which you can choose either weekly, monthly, or also fortnightly.
Can I use it?
To use any of these apps you have to be at least 18 years old. For you early arrivals, it’s not your time yet.
Currently, Afterpay and Klarna are available for international students to use, as long as you verify your details correctly.
But most of the BNPL apps are only available to permanent residents or local citizens as it requires you to show your medicare number or Australian drivers license/passport. If you have either one of these, talk to the customer service representative to see if you can apply for an account.
Some apps are exclusive to a store, so if you’re not eligible to sign up to the app, then you can’t use the BNPL feature to purchase. But Afterpay is widely available, so check in your store’s checkout terminal to see if you can find their logo.
Should I use it?
One of the reasons to use Afterpay is so that you don’t have to pay upfront. You can trickle your payments over the next month and a half, and for many of us who really want that item, but still on a budget it can definitely help.
Suresh Saicharan, who came to Melbourne from India to do masters of Design, Innovation and Technology at RMIT said that it lets him delve in his hobby.
“Im a sneaker fanatic and I’ve always wanted to buy every sneaker that I see. Back home, I used to have a full-time job and I splurged most of my salary on sneakers. However, things changed when I got here. Now, being a student, I had to find alternate ways to still collect shoes and Afterpay enabled me to do that,” He explained.
He also remembered the first time he used the payment service, “I came across Afterpay while using Instagram. It popped up as an ad on my feed and peaked my interest. The first item I picked up with Afterpay were the jordans from Footlocker.”
Buth with the great option that these apps give you, there comes some caveats:
First, you should keep in mind that you are only prolonging the payment. Eventually, you still have to pay the same amount.
You also have to pay the first quarter of the amount when at the start of purchase, otherwise your transaction is invalid.
Second, there is a fee for late payments. BNPL apps will send you a reminder prior when the next payment is due, so if you missed a payment, you will be charged a certain amount, based on their own policy. For Afterpay it is $10 dollars. And If you still don’t pay everything within a week, you’ll be charged a further $7.
Worst of all, Afterpay will suspend your account from further purchasing, and lower your spending limit. Furthermore, according to Finder.com.au, Afterpay is able to report you to a credit reporting bureau. So watch out folks.
Third, since BNPL apps are third party services, disputes and refunds will take longer and become more complicated. Essentially, your money won’t come back from the retailer/store, but rather from the BNPL apps, where they have to be informed of the refund first. It can take a while for you to get your money back.
Tips and Tricks to use BNPL Apps
So you have decided to try out the service after reading through this article. Here are some tips to keep in mind:
- You can pay early! There are no penalties for early payments.
- Set your own reminder. Most of the apps will only notify you a few days before they automatically charge your account. Prepare that payment in your calendar.
- Only buy one thing at a time. Purchasing multiple items with Afterpay is a slippery slope as your bills will rack up overtime.
Even though using BNPL apps sounds like a good opportunity, it’s important to be aware of your spending habits. If you can’t afford it right now, re-think why you want to use BNPL to purchase it.
For Saicharan, it’s every person’s duty to be responsible with their spending.
“Just like how it is important to pay your bills on time, it is your duty to manage your expenses well and pay your instalments on time!… I’ve had a fantastic experience so far, and I’m sure you will too. Spend how much you can afford, it’s the only way you can be debt-free, be it credit card or platforms like Afterpay,” he said.
So, are you ready to start using Afterpay? Or have you been using it for sometime?
Meld strongly advises international students to practice social distancing, abide by their city’s lockdown rules and to wear a mask outdoors during the Covid-19 pandemic.
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