Buy now pay later means you pay by installments over time, instead of paying the full amount upfront. How buy now pay later works. When you use a buy now pay later service, you can buy a product and delay payment. You usually pay off your purchase over a few weeks. For bigger purchases, it may be longer. You don't pay interest on the purchase. Instead you're charged fees. Lots of shops offer different buy now pay later options. Buy now pay later providers include:
Some buy now pay later arrangements are also offered through credit card networks such as Mastercard and Visa. Before you sign up to buy now pay later - what to look out for While buy now pay later can be convenient, it can be difficult to juggle repayments with other financial commitments. In 2020, ASIC research into the buy now pay later industry found that in order to meet repayments on time, one in five consumers:
Before you sign up, keep in mind:
Compare the fees charged Buy now pay later services are often advertised as 'interest free' or '0% interest'. But they charge fees that can add up quickly. They may charge:
To compare fees charged by different providers, see buy now pay later fees on the Australian Finance Industry (AFIA) website. You may also have to pay bank fees:
Using a buy now pay later service TranscriptWe explain how buy now pay later works and some tips on what to look out for if you use buy now pay later services Tips for managing buy now pay later To make the most of buy now pay later services:
Use our budget planner If you sign up for a buy now pay later option, add the repayments to your budget — and your calendar. What to do if you get into troubleMost buy now pay later providers have dedicated complaints and hardship services. Contact your provider if you have a complaint or if you're having trouble making repayments. If you need help to get your finances back on track, talk to a financial counsellor. They offer a free and confidential service to help you understand your options and deal with money issues. From the moneysmart.gov.au website 26 November 2021.
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