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Buy now, pay later: What's the catch?

Buy now, pay later: What's the catch?

More and more online and in-store retailers are feeding our appetite to spend by offering buy now, pay later options.

Getting something without paying the full amount upfront, along with no or low interest rate charges, is extremely appealing. So, what’s the catch?

Make the repayments on time and you’ll be fine. But fall behind and you could be stung with late payment fees, which could impact your credit history.

Here are some things to think about before you commit to an online payment program. 

1. Can you afford it?

Often a minimum repayment is required upfront, so check your available balance before you buy. You can check your balance with the CommBank app (turn Simple Balance on to see your balance on your smartphone with the swipe of your finger) or on your compatible smartwatch, in NetBank or even at an ATM.

2. Repay on time

You’ve decided to buy and now have to make those repayments. You’ll need to make sure you have enough money available to cover each instalment. So think ahead about upcoming bills or expenses to avoid getting caught out. 

Some online payment programs will automatically deduct the payment from your nominated account, so it’s worth setting a reminder before the due date to make sure the money is available in your account.

You could also set up recurring payments so you never miss an instalment and avoid late repayment fees. You can do this in the CommBank app > Pay someone or in NetBank.

3. Track your spending

Knowing how much you’re spending, when and on what, helps you stay on track. Turn on Transaction Notifications in the CommBank app to know when your card’s been used or charged.

4. The impact on your credit score

Over-stretching yourself financially and getting into debt that you can’t control is a real risk with buy now, pay in instalments later. Some payment programs might even report negative activity to credit reporting agencies which could affect your ability to obtain credit in the future.

If you bank with us and need help, our Financial Assistance Solutions Teams have helped thousands of customers – from people who need help managing bills so they pay on time, through to families struggling to make ends meet.

Call us on 13 30 95 if you need medium-term or on-going financial assistance as a result of financial difficulty. We work with you to develop a solution tailored to your needs. If you’re not in that position yet, there are other ways we can support you.

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. You should consider seeking independent financial advice before making any decision based on this information.