What Is The Advantage of AfterPay?

tik tok on 24/08/2020 - 14:36
Last edited 24/08/2020 - 14:36

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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Comments

  • Fergy1987 on 24/08/2020 - 14:45
    +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……

    • [Deactivated] on 24/08/2020 - 14:56
      +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.

      • Autonomic on 24/08/2020 - 15:13

        Stopped clock etc.

      • Vote for Pedro on 25/08/2020 - 19:35
        +86

        Ok boomer

          • smartazz104 on 26/08/2020 - 16:48
            +36

            @djmm: Like boomers.

            • djmm on 26/08/2020 - 19:40
              +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

          • randomusername2017 on 04/09/2020 - 21:43

            @djmm: 1969 - 79 Shroomer..

        • w37hsyea on 26/08/2020 - 21:13

          Haha, true.

      • vindictus on 26/08/2020 - 07:00
        +47

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

        • iDroid on 26/08/2020 - 12:03
          +25

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

          FTFY

          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.

          • vindictus on 26/08/2020 - 14:02
            +9

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

            • iDroid on 26/08/2020 - 14:13
              +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.

          • Vote for Pedro on 26/08/2020 - 14:30
            +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”.

            • postform on 26/08/2020 - 14:33
              +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"

              • brendanm on 26/08/2020 - 17:00
                -7

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

          • postform on 26/08/2020 - 14:31
            +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.

            • iDroid on 26/08/2020 - 14:39

              @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.

              • postform on 26/08/2020 - 14:41
                +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..

                SPEAKING OF WHICH OMG.. THEIR STOCK PRICE JESUS!

                • iDroid on 26/08/2020 - 16:34
                  +8

                  @postform:

                  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 cr@p 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.

                  • w37hsyea on 26/08/2020 - 21:16

                    @iDroid: Fair call

                  • AlexF on 29/08/2020 - 08:28

                    @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.

                • brad1-8tsi on 27/08/2020 - 09:49
                  +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.

        • VBO on 28/08/2020 - 22:24

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

      • Reddich24 on 26/08/2020 - 13:47
        +2

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

        • Vote for Pedro on 26/08/2020 - 14:31
          +2

          Scott and Angus would be proud.

      • Emerald Owl on 26/08/2020 - 18:31
        +1

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

    • digitalbargain on 25/08/2020 - 19:23
      +5

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

    • d4w17dch17d on 26/08/2020 - 13:56
      -1

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

    • bmerigan on 26/08/2020 - 22:28
      +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.

    • bargainator9 on 27/08/2020 - 13:46

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

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

      • SF3 on 27/08/2020 - 23:49

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

    • SeVeN11 on 28/08/2020 - 22:00
      +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.

  • techno2000 on 24/08/2020 - 14:47
    +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.

        • rogerm22 on 25/08/2020 - 14:56
          +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.

          • rogerm22 on 25/08/2020 - 17:02
            -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.

            • lockmc on 25/08/2020 - 17:06
              +15

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

              • rogerm22 on 25/08/2020 - 17:51
                -4

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

              • 900dollaridoos on 26/08/2020 - 10:52

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

        • pinkybrain on 25/08/2020 - 17:25
          +1

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

    • AustriaBargain on 25/08/2020 - 16:33
      -1

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

      • lunchbox99 on 25/08/2020 - 18:34
        +39

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

        • AustriaBargain on 25/08/2020 - 22:07
          +72

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

          • Zaenille on 26/08/2020 - 09:14
            +3

            @AustriaBargain: Genius

          • Cobalt_ on 26/08/2020 - 10:56
            +4

            @AustriaBargain: Perhaps consider Duckduckgo if you value your privacy.
            https://duckduckgo.com/privacy

            • AustriaBargain on 26/08/2020 - 10:58
              +1

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

              • lunchbox99 on 26/08/2020 - 16:31
                +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.

                • AustriaBargain on 26/08/2020 - 17:13

                  @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.

          • bigbadboogieman on 26/08/2020 - 23:58
            +2

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

            • patinadiary on 27/08/2020 - 14:41
              +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.

              • AustriaBargain on 27/08/2020 - 17:58

                @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.

                • dmbminaret on 29/08/2020 - 13:09

                  @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.

              • bigbadboogieman on 27/08/2020 - 18:33

                @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.

      • swimmingtoad on 25/08/2020 - 21:34
        +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.

      • iDroid on 26/08/2020 - 12:12
        +15

        Ha, you trust Afterpay more than your CC provider?

        Reality check required.

      • TheOtherLeft on 27/08/2020 - 12:01
        +3

        Do you Afterpay payments for your tinfoil hat collection?

        • AustriaBargain on 27/08/2020 - 16:44
          -1

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

  • screwball on 24/08/2020 - 14:47
    +15

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

      • dmbminaret on 25/08/2020 - 09:14
        +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?

          • dmbminaret on 25/08/2020 - 10:12
            +11

            @techno2000:

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

            Why?

            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.

            • [Deactivated] on 25/08/2020 - 16:05
              +28

              @dmbminaret:

              a.) Is there a difference?

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

              • Diji on 25/08/2020 - 17:29
                +3

                @[Deactivated]: 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.

              • unhappywizard on 25/08/2020 - 20:45
                +15

                @[Deactivated]: 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.

              • Other on 26/08/2020 - 16:05

                @[Deactivated]: A one off is better on Afterpay than having a credit card.

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

              • Cunning Linguist on 27/08/2020 - 14:17
                +3

                @[Deactivated]: 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.

              • jimbobaus on 29/08/2020 - 09:26

                @[Deactivated]: 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.

          • D-Rebbs on 25/08/2020 - 11:57
            +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.

            • witsa on 25/08/2020 - 18:12
              +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.

              • conan2000 on 25/08/2020 - 20:06
                +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.

          • od810 on 26/08/2020 - 11:23

            @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.

        • digitalbargain on 25/08/2020 - 19:23
          +7

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

          • stewy on 26/08/2020 - 01:47
            +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.

            • OpayuOnam on 26/08/2020 - 07:50

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

          • dmbminaret on 26/08/2020 - 17:02
            -1

            @digitalbargain:

            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.

            • digitalbargain on 26/08/2020 - 19:36
              +2

              @dmbminaret: There's a big difference actually

              • dmbminaret on 26/08/2020 - 20:23

                @digitalbargain:

                There's a big difference actually

                Care to enlighten us?

                • digitalbargain on 26/08/2020 - 22:27
                  +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

            • conan2000 on 27/08/2020 - 10:45
              +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.

        • vindictus on 26/08/2020 - 07:02
          +7

          buying ready made meals on AP

          the absolute state of modern ecommerce

          • dmbminaret on 26/08/2020 - 20:24

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

        • spaceflight on 27/08/2020 - 22:33
          +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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