Young people are loving what Afterpay is allowing them to purchase. The oldies are staring down shaking their heads about the dangers of getting hooked on this new addictive debt sucking financial hole.
Is it really that bad? Here are some facts that might help you decide.
Recently, ASIC busted the doors open in an attempt to clear the air and review the phenomenon that is “buy now pay later”. It can also be seen as the millennials version of “layby”.
This is what ASIC found……..
· Majority of Afterpay customers are millennials.
· One in six are in financial strife … getting overdrawn, delaying bills, or borrowing more.
· The number of transactions has risen from 50,000 a month in April 2016 to 1.9 million in June 2018, with the collective tab now at a whopping $900 million plus.
I’m sure you understand that there is nothing revolutionary about this Afterpay process. BUT, what does this actually mean for you?
Well, in our humble opinion, the actual terms of Afterpay are not all that bad as long as you pay off the instalments on time. In which case you won’t be charged any interest, so your financial life won’t be in ruins.
However, it’s kind of like a gateway to addiction. The millennials are relying on the bank’s money rather than banking on themselves.
The big takeaway here is that Afterpay claim the average purchase is $150. That’s it! We don’t like to judge but if you need instalments to cover a $150 purchase, you need to check the overall picture before you end up in that deep financial hole.
Millennials, take note, you’re never going to win if you don’t learn to stand on your own two feet and pay your own way.
And that’s why the ‘buy now, pay later’ phenomenon … will only lead to higher ticket items that you really can’t afford.