Image Credit :: Kerry Stevens / Newspix
Afterpay is every online shopping lover’s dream come true, but if you’re not using it properly it can have a serious affect on your credit history.
I hear you, how do home loan and credit companies know how much money I am spending on Afterpay at Witchery? Isn’t it interest-free?
Well, banks and credit card companies are now asking to review your Afterpay history to determine your ability to make regular payments, as well as manage any outstanding debts. Scary, right?
Statewide Super’s Head of Financial Planning and all-round money guru, Lisa Palmer, has put together 3 things you need to know when using Afterpay. Lisa, who provides financial advice to hundreds of people a year wants to empower and educate women when it comes to their finances.
1. Afterpay is a great interest-free option ONLY if you can afford the payments today.
Platforms such as Afterpay are designed with FOMO (fear of missing out) in mind. It draws people and especially young women, into purchasing luxuries or goods (shoes) they couldn’t generally afford.
Now, I am all for flexible payments and recently purchased a washing machine which cost more than I originally intended to spend. Why? The retailer had interest-free terms.
However, I’m quite disciplined with money, and know what I can afford and can pay it back before I get socked with some serious interest.
2. Make payments. Commit. Repeat.
Afterpay is touted as interest-free, and in theory it is, but if you miss regular payments you might run into some trouble in the future when it comes to your credit rating.
If you miss one payment, or don’t have enough money in your account for a direct debit, then you’ll be charged a fee.
BUT, if you miss REGULAR payments and incur a debt, then not only has your original purchase become extremely expensive, but loan and credit companies may take this as an indication of your ability or inability to pay off a home loan or credit card.
3. Let’s talk finances.
Women need to start reflecting more on their financial position… today. Small decisions, such as an online purchase, can impact your ability to reach your long term financial goals – be it going on a holiday, buying a home or saving for your retirement.
Lots of women aren’t aware that banks and loan companies are now starting to look at platforms such as zipPay, zipMoney and Afterpay as a glimpse into their money management skills.
I see a lot of women who seek financial advice just a little bit too late, and generally after a major and scary life event has happened – such as a divorce or death.
I want to see women starting to take control of their finances, even when it comes to something small such as Afterpay.
A few things you can do today to take control of your online shopping habit:
1. Stick to a budget – Work out how many purchases you can realistically pay off at once. The key word here is, R-E-A-L-I-S-T-I-C-A-L-L-Y, include your non-negotiables such as rent, food and petrol.
2. Use a debit card – credit cards charge interest and it completely defeats the purpose of using an interest free platform.
3. Set payments reminders – Shop. Make payments. Commit. Repeat – Make sure you’re prepared otherwise you’re going to get charged late fees. Set yourself a reminder and top up your account if needs be.
4. Start to build up a cash reserve – try to break the habit and have a cushion for an emergency.
Happy (smart) shopping, guys! xx
FOR MORE INFORMATION ON STATEWIDE SUPER
Statewide Super is the only industry superannuation fund based in South Australia and open to all Australians, providing financial planning advice directly from its headquarters on Victoria Square.
Statewide Super members are entitled to quality in-house financial planning advice, some of which is included as part of their membership. So, if you’re one of Statewide Super’s 145,531 members, call 1300 65 18 65 and make a time to have your financial health assessed today.
This is a sponsored post. The information provided contains general advice which does not take into account your specific objectives, financial situation or needs. Before investing, you should consider the appropriateness of this general advice with regard to your personal circumstances. You may also wish to obtain independent financial advice. This blog is not intended to be, and should not be construed in any way as, investment, legal, or personal advice.
Factual information and general advice may be provided by representatives of Statewide Superannuation Pty Ltd ABN 62 008 099 223 (AFSL 234171) as trustee for the Statewide Superannuation Trust ABN 54 145 196 298 (“Statewide Super”). Statewide Super has engaged Industry Fund Services Limited ABN 54 007 016 195 AFSL 232514 (“IFS”) to facilitate the provision of both personal and general financial advice. Financial Planners, Associate Financial Planners, and Member Solutions Advisors based at our Member Centre in Adelaide are Authorised Representatives of IFS. IFS is responsible for any advice given to you by its Authorised Representatives. Fees may apply. For further information and a copy of the applicable Financial Services Guide, visit www.statewide.com.au or call 1300 65 18 65.