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Buy Now Pay Later, Make it work for you

The buy now pay later (BNPL) revolution is well and truly here. Most people would agree how easy it is to use, but also how tempting it is to overspend, especially at this time of year.

At Frollo we want you to have a great Christmas, but we also care about your financial security in 2020! We don’t want anything to get in the way of you reaching your financial goals.

So let’s take a step back and think how we can make buy now pay later work better.  

A clean slate

If you haven’t done so already, now is the time to think about goal setting for next year, and you can’t do that without a review of your spending habits. 

Use Frollo to review your spending on Afterpay services as well as other credit card purchases. Remember to take into account future instalments too!

Update your Frollo budget, paying close attention to your Lifestyle Expenses limit for the coming months.

Afterpay in moderation

Scott Pape, The Barefoot Investor wrote: “Afterpay is the financial equivalent of marijuana”. He views it as a “gateway financial drug” which isn’t terrible in the short term but can quickly become addictive.

The convenience of these services has made it very easy to accumulate multiple repayment plans from various providers. Before you know it, you’re struggling to make your credit card payments come the New Year.

So, this Christmas, keep the BNPL repayments in mind, only buy what you can afford to repay comfortably. Then, come January/February you are ahead – that’s a win!

But, if your review already reveals you’ve binged too much and are hooked, then try these tips:

  1. If you use BNPL this Christmas, think about the repayments and try not to get tempted to buy more than you can afford to repay.
  2. Many people use Afterpay for impulse buys which we can regret later – so if you’re feeling that impulse, save yourself the debt and sleep on it before signing up to more repayments.
  3. Have the money equivalent of a “Dry January” and don’t use BNPL services for a month. Talk to your friends and make it a group goal to achieve together.
  4. Use a debit card instead of adding to your credit card debt.

Try not to get into bad habits, like all things in life, use these services in moderation, and keep things in line with your budget. If you have a bad month that’s OK, use Frollo to help recover in the next.

The buy now pay later revolution is definitely here to stay and consumer advocates and governments are looking carefully at regulation to ensure consumers are protected. But the best regulation is getting yourself into good habits and as Scott puts it “check yourself before you wreck yourself”.

2 comments on Buy Now Pay Later, Make it work for you
Tracy
  • Dec 3 2019
I have noted of late when using my debit card even if I'm tapping I'm being hit with a credit card surcharge as I don't want to carry cash I now use my Zip Card to make purchases, then monthly clear my Zip account.
Sandra Groves
  • Dec 4 2019
Hi Tracy Thanks for your comment - an awesome tip to share with the community!

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