Avoid Afterpay regret: Using Buy Now Pay Later responsibly this Black Friday

It’s sale season, and the temptation to spend is growing! Black Friday is just around the corner, with all sorts of promotions ready to give your credit card a workout. 

As the cost of living continues to creep upwards, more and more Aussies have been adding extra credit cards and Buy Now Pay Later accounts to their arsenals. These are useful tools to have when it comes to spending high season, especially with Christmas presents to buy.

Customers are more likely to spend big at stores that offer BNPL as a payment method, but this can have some major side effects. Increasing regulation on the Buy Now Pay Later sector means that BNPL debt can seriously impact your future borrowing power.

Why is Buy Now Pay Later so popular for sale season?

With so many purchases to make, this is a big time of year for BNPL use. 

As Aussies tighten their budgets to make room for all of the rising costs, it’s easy to see Buy Now Pay Later as a quick solution to the shopping you need to do. Though research from insights company Pureprofile suggests that Aussies will be cutting down on their Christmas shopping, this is challenged by an upward trend in retail sales.

Whether you’re shopping for a full list of family or don’t plan to shop for silly season at all, the real temptation is the increasing number of sales in the marketplace.

The growing influence of the North American Black Friday tradition has brought with it an increasing number of Cyber Monday sales. There are also our more classic Boxing Day sales in Australia. Along with these come newer annual staples, like ClickFrenzy’s Main Event.

Buy Now Pay Later enables you to spread your shopping around, turning a large gift into one that feels more manageable. Doing this too many times can quickly become overwhelming.

Using BNPL responsibly for your gift shopping

The problem with overuse of BNPL is that it can make it very easy to do some serious shopping. While you might feel completely on top of your finances one week, you can find yourself completely in over your head two weeks down the track. 

Here are some things to keep in mind to make sure you’re using BNPL responsibly as the sales roll by:

• How do your BNPL payments line up with your other bills? You might have plenty to spend today, with pay fresh in your bank account, but consider where you’ll be when Afterpay comes knocking in two weeks time. Remember the essentials: how will your payments coincide with rent or mortgage payments, utility bills, credit card repayments, and any other regular expenses.

• How many BNPL accounts are you using? With options like Afterpay and Paypal Pay in 4 offering their services for free, it’s much easier to wind up with multiple Buy Now Pay Later accounts than multiple credit cards in your wallet! If you’re using multiple accounts, remember that they’ll each have their own repayment schedule to consider. Some may charge for missed payments, while others may charge a variety of fees over the life of the account. The more services you have on the go, the more likely you are to incur extra charges, or to find yourself unable to line up your payments.

• Would you be buying this without BNPL? While Buy Now Pay Later can ease the pressure of a purchase, it can also make it easy to overcommit. If you are buying something you couldn’t afford in full, chances are you can’t afford to make the repayments on it either without putting considerable financial strain on yourself.

• Are you still making all of your other payments? As many as 1 in 5 Aussies admit to having cut back on essentials like meals or having been late on other bill payments in order to make Buy Now Pay Later payments. Scoring some great deals is not worth putting yourself into financial hardship.

If all of that felt a bit scary, it’s not to put you off Buy Now Pay Later as a concept. As long as you are honest with yourself and ready to commit to a repayment schedule you can stick to, you’ll be ready to head to the sales. 

Here are some surefire strategies:

• Create a budget and stick to it - no using BNPL to squirrel out of your limits!

• Pencil repayments into your calendar as you make a purchase.

• Make a list of what you need - or want - and check it twice. That means no impulse shopping!

And if it’s presents you’re shopping for? Remember the value of a heartfelt gift.

Stay on top of all the upcoming deals at our online shopping hub.