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Why diss AfterPay/ZipPay?


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#1 Lunafreya

Posted 18 August 2019 - 09:18 AM

I’ve seen criticism of this lately, but I’ve found it very useful especially when I was on Newstart as long as I was careful, got things I needed or was planning on getting and used it as a way to save money, not buy things I couldn’t afford.

For example:

I used ZipPay to pay my phone bill. This was usually &100 so it was a fair chunk of my Newstart. ZipPay effectively fit it in half so I could pay it in two instalments.

Used ZipPay to take advantage of a 50% off all fabric sale at Lincraft. It was a fair chunk, but I saved money in the end and I can afford the instalments.

So I’m being very good now and promising to not buy anything until I’ve paid off what I already owe. And it will be of help when I get my new place and need to get household things as the next thing I’m getting will be a new bed for DS.

I admit it can be misused, but then again so can many other methods of payment. I’ve grown up using Layby, so I don’t see it as that different. Layby when I was growing up was seen as smart, and I still use it at some places that gave it.

#2 Chchgirl

Posted 18 August 2019 - 09:22 AM

I love Afterpay and have never had a problem!

My girls use their own, I haven't used it for a while though. Will rejoin in Nz as I want to buy some Converse there.

I bought Doc martens for my oldest a couple of years ago and wouldn't have been able to afford tgem outright.

#3 Melbs2010

Posted 18 August 2019 - 09:29 AM

I think it's that a large proportion of people don't have the capacity to use it successfully in the way you are able to OP.  People end up with huge amounts to pay off for items they may not really need anyway.  Or very vulnerable people end up with debts they could never have possibly paid off but have had to do it for short term survival.  In that way it is somewhat predatory like short term cash/payday loans.

I suppose also it goes against the idea that if people want a material item ideally it's to be saved for in advance.  We have a massive private debt problem in Australia and having this easy access way of getting everything you want now and worrying about how to pay for it later is a big contributor.

Not discounting how it can help people save longer term like you describe. But most people lack that financial discipline

#4 Chchgirl

Posted 18 August 2019 - 09:31 AM

It only works for me as I'm not an impulse shopper, and only have one afterpay at a time. I don't even impulse buy at the shop.
I'm single income on average income. Very average. So I have to be careful!  But I can see where it can get out of hand for some.

#5 nom_de_plume

Posted 18 August 2019 - 09:36 AM

I’ve never used either (and don’t own a credit card) because I believe if you can’t afford it, you can’t afford it.

Lay by is not the same. You paid the items off over a period of time and then got the items once they were paid off. If for some reason you couldn’t afford the repayments or changed your mind you could cancel the lay by, and your money was refunded in full (usually less a nominal administration fee).

With these ‘buy now, pay later’ schemes, you get the item upfront and then you must pay or incur late fees (really just interest by another name).

Other criticisms include:

Something like 1/4-1/3 of After Pay and Zip Pay revenue comes from late fees.

They’re consumer credit and affect your credit rating.

Because they don’t fall under the same regulatory code as other financial lenders they are under no obligation to practice responsible lending or offer financial hardship assistance.

#6 Lunafreya

Posted 18 August 2019 - 09:37 AM

People have lacked financial discipline before AfterPay/ZipPay were around. Credit card debt, loans that shouldn’t have been given out by banks. There’s no reason to blame a new payment method. People always will get into more debt than they can handle.

I grew up with my Mum having a bank card. My dad was the earner and he’d pay it off when he got paid. It was a way to give her financial freedom rather than paying her an allowance. And this was before eftpos.

Edit: sorry, but I see such posts as judgemental, WTF. It wasn’t that I couldn’t afford it. I could, but if I paid it I’d have less money in my packet for other necessary things. The month my phone bill was due was usually a tough month for me on Newstart. I was able to spread it out.
And you can take advantage of a sale, especially for an item you’ve been waiting to purchase.

Edited by Lunafreya, 18 August 2019 - 09:40 AM.


#7 ~J_F~

Posted 18 August 2019 - 09:37 AM

I am really not sure how people end up with huge amounts to pay off. Most people are limited to $1000, a lucky few have higher limits and even then it’s $1500.

I also don’t think it’s a large proportion of people who misuse it, as with most things it’s always bad stories that are splashed everywhere. Never the majority of people who use it and it works well for.

EB is very anti afterpay and those style of things. I figure if you don’t like it, don’t use it then!! I don’t do credits cards for that reason but I don’t run around mouthing off about them, they work for lots of people, good luck to them!

#8 BornToLove

Posted 18 August 2019 - 09:41 AM

I’ll be upfront that I have never used either service.

My problem with zip pay and after pay is that they aren’t regulated like credit cards or personal loans. There is no credit check or even an actual person on their end verifying if you have the capacity to pay back this sort of loan before the money is handed over.

It’s very easy to overextend yourself on these services and with the ‘need it now’ Instagram culture. Next thing you know, you are in a cycle of debt that you can’t get out of and/or you find yourself relying on them to pay regular expenses (like mobile phone plans).

To me, they seem like a backwards approach to saving and budgeting that hurts the consumer and vendor in the long run (afterpay/zip pay make most of their money from vendors).

#9 Lunafreya

Posted 18 August 2019 - 09:43 AM

I agree. The thing I like about AfterPay/ZipPay is I can see how much I’ve spent when I’m spending. I figure I’d misuse a credit card so don’t have one.

Next on my list to get is a good pair of tall boots that will last me at least as long as the ones I have now (had them 15 years). That won’t be until down the track, but hopefully I can take advantage of end of season sales.

Edit: Can I point out that the two posters who are against ZipPay/AfterPay have both not used it?

Edited by Lunafreya, 18 August 2019 - 09:45 AM.


#10 Renovators delight

Posted 18 August 2019 - 09:45 AM

Unfortunately, the people who can least understand and afford to default are the ones who love a nice, easy service.

I think Scott Pape has a pretty accurate take:
https://barefootinve...uana-of-credit/

Read this article while in the midst of DP trying to sort out his 20 something year old sister's afterpay mess. One with a credit card, car loan, payday loans and then chuck afterpay into the mix for a TV she 'needed'.

#11 Lunafreya

Posted 18 August 2019 - 09:50 AM

^Slippery slope fallacy anyone? He says 1 in 6, this means it doesn’t go bad for 5/6 people.

Also, gateway drugs are a fallacy. Most people who use marijuana do not go on to use other drugs.

Again, I don’t see this as free money. I see it as a way to extend the money I have.

#12 Renovators delight

Posted 18 August 2019 - 09:52 AM

People diss it because they have seen their stupid relatives get in horrible debt because they use it. Also I hate marijuana, and its a horrible drug.

#13 ~J_F~

Posted 18 August 2019 - 09:57 AM

I like marijuana and afterpay.

Winning over here!!

#14 Melbs2010

Posted 18 August 2019 - 09:59 AM

OP I think there is an element of moralizing from some critics.  Where it's an assumption that everyone using it lacks discipline and is a "must have now" type person.  That's of course not the case.

But then there is also a genuine concern for those lacking discipline, for vulnerable people who get into trouble because they never had the means to pay it off in the first place.  It's a small loan essentially with no credit checks taking place.  That is also a risk and on the back of the banking royal commission we need to protect people from predatory lending practices.

#15 Lunafreya

Posted 18 August 2019 - 09:59 AM

My ex husband has gone into horrible debt and soon bankruptcy because of credit cards and his terrible spending habits. If you know how to manage your money, then you won’t get in trouble.

I know to avoid traps like Nimble and PayDay loans. I checked the terms of AfterPay and ZipPay. And I also grew up waiting for things as well as making sure if I’m spending a lot of money it’s going to be worthwhile. Case in point, the boots I’ve had for 15 years.

Edited by Lunafreya, 18 August 2019 - 10:03 AM.


#16 WannabeMasterchef

Posted 18 August 2019 - 10:02 AM

For those of us who dont use it then it could be seen that the price of everything goes up to facilitate those who use it and then default. Plus the admin costs of running it. And thinking that businesses will suffer an unfair loss.
  That could be a reason why?  

Realistically I guess shops offer it because they sell more that way so its worth it to them. So if that keeps people in business its not a bad thing.

I think afterpay IS counted as some kind of credit check though?  A friend with a high income used it a lot but it came up as a negative against their credit rating when she went to upgrade their car - she had applied for 'too much' credit even though she had paid each purchase off in full. Trap to beware of I guess?

Edited by WannabeMasterchef, 18 August 2019 - 10:04 AM.


#17 Expelliarmus

Posted 18 August 2019 - 10:03 AM

I think the issue is that many people don’t know how to manage money and do get into trouble with these schemes and the lack of oversight in them means people do up in trouble.

#18 Lunafreya

Posted 18 August 2019 - 10:06 AM

Again, this isn’t unique to AfterPay.

#19 Expelliarmus

Posted 18 August 2019 - 10:08 AM

I imagine that people who are against afterpay are also against the other ways that are similar. Never said it was unique.

#20 ~J_F~

Posted 18 August 2019 - 10:08 AM

View PostWannabeMasterchef, on 18 August 2019 - 10:02 AM, said:

.

I think afterpay IS counted as some kind of credit check though?  A friend with a high income used it a lot but it came up as a negative against their credit rating when she went to upgrade their car - she had applied for 'too much' credit even though she had paid each purchase off in full. Trap to beware of I guess?

It is. Part of their terms are they can credit check you at any point during your usage. A couple of groups I am on, it often seems their limits drop or they are no longer able to use it once a credit check is run.

#21 molinero

Posted 18 August 2019 - 10:30 AM

When I worked for a bank I serviced about 80 customers a day.

What I can tell you is that most people in Australia have personal debt, regardless of whether they also have a mortgage.

I'd say credit cards and personal loans for ridiculously priced cars are far more dangerous than afterpay.

Credit card limits can be in the thousands, and car loans mean you are paying interest on something that has devalued as soon as you drive it home.

#22 Mmmcheese

Posted 18 August 2019 - 10:34 AM

I actually don't know much about them, but I have friends that keep getting caught with GE type 'buy now, pay later' type things. They have little financial literacy and their financial position scares the crap out of me and causes them endless stress and worry. So I am very wary of anything like that. Unethical banks target those that can least afford these types of things.

#23 Lunafreya

Posted 18 August 2019 - 10:49 AM

I have avoided the GE cards, Freedom uses them so I won’t shop there.

#24 Rainyeyes

Posted 18 August 2019 - 10:57 AM

I have never used Afterpay as a consumer but for a time we had a small business and got it due to having several customer message requesting it.Their fee's are higher than with other payment methods and in the event of a customer returning an item we would offer a full refund with other payment methods like PayPal we would get our fee refund to us by them but Afterpay does not so we were out of pocket. Had we continued with the business we would have removed the option to use it for payment.

#25 WannabeMasterchef

Posted 18 August 2019 - 11:01 AM

View Postmolinero, on 18 August 2019 - 10:30 AM, said:

Credit card limits can be in the thousands, and car loans mean you are paying interest on something that has devalued as soon as you drive it home.
-----

I think cars are a different beast in some ways because sometimes if you have an older car you will have to keep throwing money at it to keep it on the road.  Im seeing this happening with a friend who has 4 kids and a low income. Their car is costing them a lot but they cant afford to upgrade as there aren't many 7 seaters for sale in their price range.

Of course you also have people who get very expensive cars when they don't need it.

I keep my cars to be within the warranty period (<7 years) as I have huge anxiety about car accidents having had bad experience in the past. Not everyone can afford to do that of course. Helps that we only have one car.

Edited by WannabeMasterchef, 18 August 2019 - 11:03 AM.





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