Aussies need to be wary of 'buy now, pay later' deals

By Mozo ·

Australians have been urged to be wary of attractive low interest "buy now, pay later" deals when purchasing goods.

Many people who are looking to reduce the amount they spend on their credit cards are drawn in by these promotions, as they see them as a good way of securing luxury items such as TVs without having to make a big one-off payment.

According to the most recent Westpac-Melbourne index of Australian consumer sentiment, Aussies have been more willing to spend money this month, but many people are still keeping a tight hold on the purse strings.

Consumer group Choice has warned that many of the seemingly good deals offered by retailers can come with a sting in the tail, as the interest rates placed on buy now, pay later packages can be extortionate.

Spokeswoman Ingrid Just said that a no-deposit, four-years-to-pay promotion offered by one store came with interest rates of 26 per cent and also carried $220 in fees.

"You have to look at some of the fees and commitments when you sign up," she told News Limited.

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