The dangers of 'buy now, pay later'

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A raft of 'buy now, pay later' options like Afterpay and zipPay are giving the consumers the opportunity take purchases home immediately and pay them off over time.

It may sound convenient but there are downsides that shoppers need to be aware of, which ME – your industry super fund–owned bank – outlines below.

Late fees can be costly

There's no cost to sign up, and no interest charges, but neither Afterpay nor zipPay are entirely fee-free.

Afterpay requires payments of four fortnightly instalments, while zipPay lets customers set up weekly, fortnightly or monthly repayments.

If you're late with an Afterpay repayment, a $10 fee applies plus a further $7 charge if your payment is still outstanding seven days later. So, missing all the repayments on, say, a $100 pair of shoes could cost you $68 in fees.

With zipPay, if you don't pay off your statement balance in full by the end of the month, a $6 monthly fee is added to your account.

Shoppers aren't protected by the National Credit Code

Your credit or debit card comes with scheme guarantees that protect you if the card is lost or stolen. Your credit card also comes with an individually determined credit limit to ensure you don't get into financial hot water. That's very different from the likes of Afterpay and zipPay, which aren't covered by the National Credit Code, so there is no requirement to check whether or not consumers can afford their purchases.

By paying off your credit card in full each month, it's possible to avoid interest charges altogether, and if the tab is building, consider switching to a low rate card or take advantage of a balance transfer offer.

This article is brought to you by ME. For more information, please visit

Members Equity Bank Limited ABN 56 070 887 679.

Media Super does not recommend, endorse or accept responsibility for any products or services supplied or provided by any third party. Terms and conditions apply - these should be obtained from ME Bank. Media Super does not accept liability for any direct or indirect loss or damage caused by the products and services provided by ME Bank. Media Super may invest in this third party but does not receive any commissions from this organisation as a result of members using their products and services.