What Is The Advantage of AfterPay?

I recently thought of checking out after pay - the way it works is if I use afterpay for a $100 item, I need to pay them 4 equal payments of $25 every week. If I have a credit card, I can still keep that $100 in a savings account, earn a few cents before the billing cycle and pay my credit card the same amount of money and even earn some points.

What is the advantage of AfterPay ?

If a person had the same amount of dedication towards payments, wouldn't just a credit card suffice ?
I understand afterpay as an option for people who don't have a credit card - out of choice. Other than this what appeals to people about after pay ?

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  • +66

    yes but some people with credit cards are not bright and dont pay before the billing due date….and their 38888% interest on something they couldnt afford in the first place means their $100 purchase is $10000000 dollars by the time they pay it off.

    Like people I know that get personal loans to buy handbags……

    • +38

      These are also the same people who complain that they live pay cheque to pay cheque because bOomERs ruINed tHe EcoNOMy rather than blaming themselves for being financially illiterate.

      • Stopped clock etc.

      • +86

        Ok boomer

        • -19

          This phrase is so tired already

          • +36

            @djmm: Like boomers.

            • +25

              @smartazz104: I'm not a boomer but interestingly from my experience, the people who said these sort of stuff were either the not so bright types or ironically, the kids who got spoiled rotten by their boomers parents … So go figure

          • @djmm: 1969 - 79 Shroomer..

        • -15

          Can almost guarantee I'm younger than you lmao. Apologies for not following the typical millennial attitude of blaming everything on other people.

        • Haha, true.

      • +47

        I mean sure but boomers def ruined the planet, not just the economy

        • +25

          I mean sure but boomers humans def ruined the planet, not just the economy


          You can't call out one generation for all the progress made up to this point. There was consequences of human/societal advances that were now dealing with/beginning to understand.

          But all these boomers that destroyed everything are the same boomers that made all the good stuff too - stop blaming others and start doing something to change.

          Blaming boomers is a cop-out.

          • +9

            @iDroid: I'd blame the industrial revolution generation but they're all dead

            • +11

              @vindictus: We could go all the way back to those damn monkeys that decided to leave the jungle and live it up in cave "mansion", they had no idea of the troubles they were causing.

          • +19

            @iDroid: Boomers are the ones preventing any real action.

            Don’t dare wind back any government handouts to boomers because they cry and moan endlessly “we worked all our lives to earn these handouts”.

            • +30

              @Vote for Pedro: Haha exactly — Bill shorten — "lets remove some of the benefits of negative gearing to allow everyone to have shelter" Boomer "NO! ZoOmErS EaT AvO On ToAsT aNd ArE LaZy PeOpLe ThAT whY ThEY Can'T hAve HoUsE"

              • -7

                @postform: Zoomers are lazy though, and like to live beyond their means.

          • +1

            @iDroid: Sure the smart phones great. But sure would like to buy a house. Too bad they made the "good stuff" in the housing market.

            • @postform: Oh, you don't like property investors and the ridiculous government policies that encouraged investment in property and express that by blaming all boomers..

              Seriously, blaming 'boomers' is very short sighted.

              • +13

                @iDroid: hang on. If you look at the data who we're the biggest buyers and spectulators of the market? I know for a fact it's the boomers. And the government will kneel down and take it up the rear for your voting majority base. I'm not sure it's been apparent to you but there is a different between investors and spectulators. Look it up.

                And yes. Yes I can. Cause the same boomers who defend themselves as "ohhh look the government is why i buy its them! Its their fault" then go on to say to us that "oh look at these lost guys who just go to university and study nothing" hang on.. oh right hecs is government policy. Oh and also you boomers got free university so don't even start. You rode the wave not created it.

                Anyways sorry for everyone else. I don't like it when people who are mis-informed get so political.. at least get your facts right. This is a thread for afterpay..


                • +8


                  hang on. If you look at the data who we're the biggest buyers and speculators of the market? I know for a fact it's the boomers.

                  What percentage of boomers are property investors (whether it be speculative or not)? Not all boomers are property investors - best not to generalisations.

                  Don't get me wrong, I firmly believe there is a housing affordability issue and it's pretty dire. I just think it's misplaced to blame a single group. You're angry about the situation and boomers are easy to blame.

                  Boomers make up large segment of property investors - absolutely. It makes sense that the generation who was well positioned (ie had saved or accumulated enough to begin investing) would invest in what's being sold to them. It could have been any investment vehicle, it just happened to be property in their time. Boomers are not at fault that they existed in the time when investing in property was considered normal (and promoted heavily), it's just coincidence for the 'boomer'. They didn't individually orchestrate it.

                  Blaming boomers for making good investment choices doesn't make a lot of sense.

                  If the opportunity was not there for boomers and was here today for millennial's, I'm pretty sure they'd jump on it.

                  In my personal opinion the main issue is that too many politicians have a conflict of interest when considering changes to property investing (ie, they own a [email protected] ton of investment properties). Yes a large number of these same pollies are likely boomers too.

                  I'm not sure it's been apparent to you but there is a different between investors and spectulators. Look it up.

                  Getting snarky is not really needed. Speculative investors are investors. 'investors' is a non specific term that encompasses all investment types (regardless of how stupid some of them are). Speculative being one of them.

                  Cause the same boomers who defend themselves as "ohhh look the government is why i buy its them! Its their fault" then go on to say to us that "oh look at these lost guys who just go to university and study nothing" hang on..

                  This is a story, not reality. You're putting different ideas together and making out like it's a real thing. I'd wager that there are more boomers who say neither of those statements than there are that do. But let's keep painting with that brush.

                  Anyways sorry for everyone else. I don't like it when people who are mis-informed get so political.. at least get your facts right.

                  Ouch, I feel I was just hit by the irony train.

                  • @iDroid: Fair call

                  • @iDroid: Boomers aren’t at fault - they just follow instinct - accumulate wealth. Problem’s the government that panders to them. Government, on balance, is meant to do well by all.

                • +3

                  @postform: The boomer generation is currently considered to be 1946-1964 which is interesting because 20 years back it was considered to be 1946-1957 (I would joke with my sister that she was a boomer and I wasn't). Given that the "Baby Boom" occurred when WW2 ended and the military came home and had to release a lot of built up tension 1964 really is stretching the balloon. I was born in '61 and dad did war service so I guess I'm a boomer.

                  Free University was introduced by Whitlams Labor government in 1974. Prior to this universities were quite elitist and you needed to have a lot of money or get one of the numerous scholarships or bursaries available at the time. The good times lasted until 1989. In reality, the bulk of the Baby Boomer generation didn't benefit from free university which wasn't really free as you had compulsory student union fees and several other hidden charges but these fees weren't deal breakers. Early Gen X benefited slightly more IMO.

                  I recall my TAFE fees for my trade and ADip in 1980 were higher than my partners uni fees.

                  The great thing about free uni is that it opened the door for many smart middle and lower class people to get a degree and that door has remained open (despite the ridiculous cost). It meant a diverse influx of folk into the work force and a dilution of the "old school tie" club.

                  Housing affordability has gone out the window but among my group of friends and work colleagues of similar age only 20% would have an investment property. The biggest property investors I've met are in their 30s-40s, earning $100k-$200k and leveraged to the hilt with 2-4 properties and eating noodles. I think they'd be in a world of pain at the moment. The other big group I know are immigrants from Vietnam & Lebanon (1970s/80s influx) that own a lot of very average houses in the middle and outer ring suburbs.

        • I’ve heard there is a virus killing the boomers right now.

      • +2

        Lmao, "I'm not like other millenials". What are you trying to virtue signal and who are you trying to impress?

        • +2

          Scott and Angus would be proud.

      • +1

        You don’t think wages compared to housing are lower now than ever before?

    • +5

      Afterpay is one of the most frequent charges on credit cards.. they're not mutually exclusive.. pay later with credit is a thing..

    • -1

      Its essentially similar to a payday loan which you pay After Pay(day).

    • +2

      I worked with a chick who used to spend every dollar she earned plus extra because if she didn't her husband would.
      They had $20,000 debt between them.
      What a mess.

    • "Like people I know that get personal loans to buy handbags……"

      Please tell me you're joking. Personal loan to buy a handbag?

      • Maybe it has letters such as H, G, LV on them, those types. Probably for a selfie on insta

    • +9

      This is such a big misconception!

      Let me explain with an example

      Say you purchase an item for $100 and not make the payment for 1 week.

      Option A: pay with credit card with @ 20% interest rate.
      Your interest payment would be $100 x 20% x 7 days / 354 days in a year = 38.36c

      Option A: pay with after pay and missed that first week payment.
      Your interest payment is $0, but you will be charged a $10 late fee. Your effective interest rate is actually. ($10/ $100 of original purchase price) / 14 days x 365 days in a year (to annualize it) x 100 to convert to %= 260.71% interest rate!! (Significantly more than the 20% credit card fee!!)

      There is a further $7 late fee for every week you're late
      295.48% if you miss that second payment (21days)
      312.86% if you miss that third payment (28days)

      If you are not disciplined with payments, it would be cheaper to get a cash advance from a credit card or a personal loan and pay the interest vs afterpay.

      Note: most credit card will have a minimum monthly payment of 2-3% of the balance owing or $50 whichever is greater at the statement date which is up to 55 days from purchase. If you do miss this payment on a credit cards, banks will charge you fees too ($9-35) and at this point things start to normalise between afterpay and Banks. The point is you have up to 55 days whereas with afterpay you have to make weekly payments.

      After pay is actually significantly more expensive for people who cannot afford it (I.e.misses a payment). It also makes things more expensive for consumers who can afford it. Afterpay charges retailers 4-6% of the sale price as their fee for their service. Retailers will undoubtedly pass this onto the consumers. In contrast, merchant fees for credit card is between 0.5% - 2% (again significantly cheaper than afterpay)

      The reason why afterpay is successful is because they found a loop hole in the consumer credit code and is able to give everybody unregulated credit without making sure it's customers can actually afford to repay and also don't bother with credit checks. ie. Afterpay reduces the friction of consumer receiving unregulated credit whereas Banks are forced to make consumers jump through hurdles, perform credit checks as part of their responsible lending obligations making it significantly harder for consumers to get regulated credit.

  • +9

    Its 4 equal payments of $25 every 2 weeks so 45 days time.But yeah i dont see the point unless ur a beggar.

        • +10

          I was wrong. I've made so many purchases with Afterpay, that I have payments taken out of my account every few days. I thought it was weekly payments, but it's not. Anyway the time it takes to pay is 43 days, not 45.

          • -1

            @rogerm22: I don't know why I've got the down votes. I honestly thought the payments were made weekly and I admitted that I was wrong.

            • +15

              @rogerm22: Wrong = down votes. How do you not get that?

              • -4

                @lockmc: I do. But I was also down voted on my post where I admitted I was wrong.

              • @lockmc: You have one downvote, wonder who that was haha

        • +1

          Pay for your order in four payments, every 2 weeks. Always interest-free.

    • -1

      I like Afterpay because my credit card companies don’t need to know all all my spending.

      • +39

        a) why?
        b) so afterpay knowing is ok?
        c) why?

        • +72

          I like to spread out my data risk. It's the same reason why I use Bing for porn.

          • +3
          • +4

            @AustriaBargain: Perhaps consider Duckduckgo if you value your privacy.

            • +1

              @Cobalt_: I tried that. But I ended up repeating every search with g! operator anyway.

              • +1

                @AustriaBargain: Well using google is instantly divulging everything about you, so stop wasting your time "spreading your risk" with purchases, whatever the hell that means.

                I'm not sure what the risk is and I'm unclear how using APT mitigates that risk? The company will come and steal the item? They will know you like ribbed condoms? I don't get it.

                On second thoughts… I don't care.

                • @lunchbox99: The risk of them knowing my purchasing habits I mean. I don’t care if they report that they are currently lending me a few hundred bucks. I always pay my bills, they can tell anyone they want. As long as they don’t tell them exactly what I’ve bought or even where I bought it.

          • +2

            @AustriaBargain: Try using cash or crypto that's even more private.

            • +2

              @bigbadboogieman: @AustriaBargain: Let me let you in on a little secret. The mob which consolidates your CC data for all the 4 banks and Amex also does all the Name and Credit checks for APT. Kind of a waste of effort what you are doing if you ask me.
              How to i know this? I used to manage the consumer bureau division for that mob.

              • @patinadiary: It seems unlikely that Afterpay would share my actual purchase history with anyone, even their companion bank. All the payments come up as just "afterpay" on my bank's end.

                • @AustriaBargain: That is your bank's limitations in showing on your statements. I use up digital bank and every payment is reconciled with who the order was with.

              • @patinadiary: Well that's kind of an open secret. Was only suggesting cash because you preferred anonymity and privacy. I don't use Afterpay either.

      • +11

        Lol. You do realise AfterPay are essentially a consumer data company in disguise?
        It's where the underlying value in the business is.
        Data is gold.

      • +15

        Ha, you trust Afterpay more than your CC provider?

        Reality check required.

      • +3

        Do you Afterpay payments for your tinfoil hat collection?

        • -1

          We'll see who is laughing when Emperor Trump sends everyone to a concentration camp based on their Google search history.

  • +15

    I don't own a credit card. I use AP for when I want to break a large purchase up into increments.

    • -10

      If you feel the need to split purchases of a few hundred dollars i would suggest you have big problems.

      • +47

        If you feel the need to split purchases of a few hundred dollars i would suggest you have big problems.

        This is such a bogus statement.

        I use AP regularly. I have enough money. Why not use it? It costs me nothing to use it.

        Average scenario: I want to buy two months worth of ready made meals that I eat at work. There is a price break for buying that quantity so I will save money. I can afford to buy in one hit, but why would I when I'm using the purchase over eight weeks anyway?

        • -18

          If you have enough money then use your credit card instead.

          • +11


            If you have enough money then use your credit card instead.


            a.) Is there a difference?
            b.) It is my choice.
            c.) Please explain the big problems I must have if I choose to split payments using afterpay over using a credit card.

            • +28


              a.) Is there a difference?

              Yes, one makes it hard to get a mortgage while the other lets you accumulate reward points.

              • +3

                @DisabledUser193539: Maybe the rewards points don't outweigh the annual fee? I know from looking at getting a card for myself that none of them work out beneficial for me. It depends on your spending habits.

              • +15

                @DisabledUser193539: you know you can use both right…

                I link my credit card to afterpay. It pushes out the debt even further interest free and you earn reward points…

                All the while the actual money sits in mortgage offset.

              • @DisabledUser193539: A one off is better on Afterpay than having a credit card.

                Also more controllable for the consumer (who really cancels their credit card?).

              • +3

                @DisabledUser193539: I don't know what Afterpay is like for buyer protection but for Visa/Mastercard the chargeback protection you automatically get is worth it alone. It's basically free insurance on every single purchase you make, and overwhelmingly judged in customer's favour if something goes wrong.

              • @DisabledUser193539: This is such a misconception.

                almost every bank has zero issue with Buy No Pay Later, what they have an issue with is when the applicant has multiple accounts.
                ZiPay, OpenPay, Afterpay, Humm and so on.

                We recently applied for a loan with a big lender and i asked them directly.
                The answer i got was one BNPL account is absolutely no issue when getting a home loan. Having more than one… then bells go off and they dig a LOT deeper into your spending habits etc.

                Remember that almost every bank is an investor (or owner) in BNPL services.

          • +1

            @techno2000: What is the difference between using Afterpay or a credit card?

            In both cases you are deferring repayments interest free (assuming you pay off your credit card balance when due). With Afterpay you can do this for up to 6 weeks. You can also have Afterpay repayments linked to a credit card rather than a debit card if you wish to extend your interest free period even further.

            • +1

              @D-Rebbs: if you pay your afterpay payment with a credit card, does it count as a purchase in which case you get your 55 interest free days or does it count as a withdrawal in which case you get billed interest immediately?

              The latter is what usually happens if you use a credit card to pay off another credit card.

              • +2

                @witsa: You will get the interest free days on a credit card. It's treated as a purchase. The only advantage I see is I could make a purchase on the last day of my credit card cycle and technically split a payment over 3 credit card bills. This would be good for larger purchases for some, but given its limit of $1500 I personally find AfterPay useless.

          • @techno2000: I use Afterpay with Credit Card funding. Got even more interest free period. It's no brainer, it's a tool to smooth the cash flow out while my cash parks in offset account.

        • +7

          Whilst you don't pay directly, the business does.. and eventually they pass that cost on to the consumer

          • +10

            @digitalbargain: I'm glad someone gets it.

            Afterpay charges a good whack for their services and retailers won't keep absorbing the cost of it forever.

            • @stewy: Looks like for now Afterpay and other similar services are absorbing the costs as they have not had any profit.

          • -1


            Whilst you don't pay directly, the business does.. and eventually they pass that cost on to the consumer

            And they don't get charged fees for mastercard and visa? Or AMEX?? They often pass these on directly or indirectly. No difference.

            • +2

              @dmbminaret: There's a big difference actually

              • @digitalbargain:

                There's a big difference actually

                Care to enlighten us?

                • +1

                  @dmbminaret: I mean I think the threads in this cover all of the differences.

                  Regarding the difference in fees which you mention being passed on, they are roughly 9-10x higher than visa

            • +1

              @dmbminaret: Afterpay fees are over 4% from my understanding, which is 2-3x more than the retailer pays for credit cards. So it's a fairly significant extra cost.

        • +7

          buying ready made meals on AP

          the absolute state of modern ecommerce

          • @vindictus: It was an example of something that you might not use right away but use is spread evenly over the payment time.

        • +1

          I use AP regularly. I have enough money. Why not use it? It costs me nothing to use it.

          Generally higher prices as merchants factor in the higher fees associated with afterpay

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