As ASIC eyes Afterpay, keep your credit card handy

Aussie regulatory giant ASIC announced that it would be keeping a close eye on “buy now, pay later” schemes like Afterpay on Friday, which might make you nervous. Fortunately, the good old credit card is always there to fall back on.

Similar to the lay-by of yesteryear, payment platforms like Afterpay allow Aussies to purchase their favourite retail goods (and take them home immediately) for a smidge of the actual cost, with the rest paid off in fortnightly instalments.  

But now regulators have their eye on the platform, looking to see whether it is as good as we all think it is.

“ASIC is currently monitoring this industry and engaging with both industry participants and consumer groups,” said ASIC senior executive, Michael Saadat.

“We plan to collect data from buy now, pay later providers in the first quarter of 2018 to determine the size and demographics of the industry and participants, as well as to identify any consumer harms."

RELATED: Love Afterpay? Here are the traps you should know about

These kinds of payment methods have taken hold in Australia this year. In September, Afterpay announced it was now responsible for processing 20% of total online fashion retail and planned on being in over 4000 physical shop fronts come Christmas.

Part of what makes Afterpay so popular is that it doesn’t charge you any interest for your purchases, just a $10 late payment fee, which grows to $17 if you leave it longer than a week.

While this might seem like a great thing for Aussies who don’t want to pay the full price right away but also can’t stand the thought of costly interest charges, it also means that the company operates outside of credit consumer laws, so it isn’t really regulated.

RELATED: The 9 credit card perks you forgot (or didn’t know) you had

But regulated options still exist for savvy shoppers who don’t want to pay the bulk of their Christmas haul upfront. For example, interest free credit cards, when used responsibly, can provide a lot of the same benefits as these buy now, pay later payment options.

“If you’re clever with your credit card payments you can use your piece of plastic for the Christmas shopping haul, making the most of the interest free days that it offers and avoiding new year interest charges on your bill,” said Mozo Director, Kirsty Lamont.

But it isn’t just the interest free aspect of Afterpay that is attractive for Aussies. If you’re keen on having a fixed payment plan to make sure you pay off your spending but would rather stick with  plastic, there are options on the market, like the ING Orange One card which features an option to pay for larger purchases via instalments, albeit at a 9.99% interest rate.

Check out a popular bunch of interest free credit cards in the table below or read up on how to best use your credit card for the Christmas shopping spree with our credit cards for shoppers guide.

Interest free credit cards for you - last updated 19 March 2024

Search promoted credit cards below or do a full Mozo database search. Advertiser disclosure
  • Westpac Flex Card

    Balance transfer rate
    No current offer
    Purchase rate
    0% p.a.
    Annual fee
    $120 $10 monthly fee waived if the outstanding balance on the previous statement is paid in full by the due date.
    Compare
    Details
  • NAB StraightUp Card

    Pay no interest and no late payment fees, just a $20 monthly fee for a $3,000 credit limit. If you don't make any purchases and have an outstanding balance of $0 during the whole statement period, the monthly fee will be reversed. Pay no foreign currency fees when you buy online or overseas.

    Balance transfer rate
    No current offer
    Purchase rate
    n/a
    Annual fee
    $240 $20/month - waived if no spend & no balance owing
    Compare
    Details
  • Community First Bank n0w Credit Card

    Balance transfer rate
    No current offer
    Purchase rate
    n/a
    Annual fee
    $228 Monthly fee is waived if account has a $0 balance and if card isn't used during the calendar month.
    Compare
    Details
  • American Express Qantas Discovery Card

    Earn 1.75 Qantas Points on eligible Qantas products and services per $1 spent (T&Cs apply). Enjoy $0 Annual Card Fee. Get the security of Card Refund and Purchase Cover. Up to four additional Cards at no extra fee. Redeem your points for Classic Flight Rewards (T&Cs apply).

    Balance transfer rate
    No current offer
    Purchase rate
    23.99% p.a.
    Annual fee
    $0
    Compare
    Details

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