Choice rates Afterpay for consumers
Afterpay is a preferable service to pay day loans because no interest is charged.
— Stefanie Menezes, Choice
CONSUMERS are being warned not get themselves in over their heads with a new payment plan system.
Afterpay, a system that allows consumers, more than one million in Australia, to buy and receive goods and pay them off in eight equal payments has exploded in popularity.
There are 7200 retailers on the Afterpay platform including Jetstar, Myer, Officeworks, and Toys’R’Us.
The company has spruiked itself as a modern lay-by system promoting responsible spending.
But South Australia’s largest welfare lobby warned consumers not to spend money they did not have.
SA Council of Social Services chief executive Ross Womersley said: “It is just another means to get people access to credit when they may not have the means to find the money.”
But Stefanie Menezes, of consumer advocate group Choice, said Afterpay was better than some other options.
“Afterpay is a preferable service to pay day loans because no interest is charged,” she said.
“This means you could pay off a $100 pair of jeans over eight weeks without paying anything extra.”
Afterpay’s website shows customers can be charged $10 each time instalments are not honoured and $7 seven days after the payment is due if still unpaid.
Afterpay executive director David Hancock said retailers using the system had an average limit per transaction of about $150-$200.