Buy now pay later

What is buy now pay later?

Buy now pay later is a way to pay for something – you pay just one part and get it straight away, then pay the rest in equal instalments over the next few weeks. Remember, buy now pay later is debt, so understanding how it works and avoiding taking on too many of these loans is important.

Learn more about buy now pay later with this video and learning activity.

Transcript

Let’s be honest, we all want the things we like straight away, like the latest shoes. Buy now pay later is a popular way to pay for these things, especially online.

So how does it work?

You really want those shoes, but don’t have the cash. With buy now pay later, you pay one part now and the company covers the rest. You then pay them back in installments over a set period of time.

Buy now pay later can help you get what you want quickly, BUT, it is important to understand what you’re signing up for.

Buy now pay later is really debt. and that makes it risky.

You may have the shoes on your feet, but you now owe the company the rest of money you didn’t pay upfront. If you miss those future payments, you can get charged what's called a penalty, so extra money on top of what you already owe. Ouch.

If you have more than one buy now pay later on the go, they get harder to track. You’re probably owing a lot more than you figured! It gets tricky when all those payments come out of your debit card account.

Before you use it, if you don’t have the total amount up-front, check whether you should be making the purchase in the first place.

When you do use buy now pay later, do one at a time to keep it simple.

Like everything with your money, it is important to understand what debt you are taking on and keep an eye on your repayments closely.

Buy now pay later animation and learning activity 118 kb, PDF

Learn about buy now pay later with animations and activities that teach you how it works and what to watch out for as you use this type of debt to pay for those things you want.

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