Hi, my daughter has an Afterpay account and is always coming home with new purchases. Can someone please explain what Afterpay is and what the risks are – should we be concerned?
On its own, Afterpay isn’t a problem. The customer gets to take the product or use a service and then pays 4 fortnightly payments to pay off the purchase.
Where the trap starts is that the customer “learns” that it is ok to buy things that you don’t have money for today and in many cases leads to credit cards and personal loans or even payday loans
Afterpay is credit just a like a credit card with different conditions. It is a buy now pay later over several fortnightly payments. People like Afterpay because their is no credit application. Like any credit you need to know you can pay the debt off.
From a getting a home loan point off view :- Afterpay debts should be paid off, any outstanding liabilities i.e. repayments no matter how short will reduce the amount you can borrow. Depending on your income this can cause and issue.