Story Highlights
- Afterpay’s new policy lets users choose due dates and delay first payments, but could this flexibility lead to overspending?
- Research shows many BNPL users don’t consider their overall finances before a purchase, and the delayed gratification can be risky.
- Breaking purchases into small chunks can trick users into spending more due to “mental accounting.”
- Financial literacy, clear fee structures, and spending limits are crucial for BNPL to be a tool for financial well-being.
Afterpay, a leading “Buy Now, Pay Later” (BNPL) service, recently announced a policy change that gives users more control over their repayments. This includes choosing due dates and delaying the first payment for certain purchases. While Afterpay positions this as a step towards responsible spending, some experts question if it might lead to a hidden trap.
On the surface, increased flexibility seems like a win for consumers. “Aligning repayments with paydays allows for better budgeting,” argues Afterpay. Imagine a student who can time their first BNPL payment to coincide with their next paycheck. This could ease the financial burden and promote responsible credit usage.

However, research paints a more complex picture. A 2022 report by the Australian Securities and Investments Commission (ASIC) revealed a concerning trend: 42% of BNPL users rarely consider their overall financial situation before a purchase. This impulsivity is amplified by the delayed gratification aspect of BNPL. The two-week window before the first payment can downplay the true cost, potentially leading to a cycle of debt.
Why BNPL Can Be a Slippery Slope
BNPL breaks down purchases into bite-sized chunks, creating a deceptive sense of affordability. Psychologists call this phenomenon “mental accounting.” People tend to compartmentalize their spending, making it easier to justify an additional purchase because they’ve already “budgeted” for the first installment. This can quickly snowball into a situation where managing multiple BNPL repayments becomes overwhelming.
Furthermore, a 2023 report by the Financial Rights Legal Centre found a link between BNPL use and increased financial stress. The report highlights the ease with which users can accrue debt across multiple platforms, due to the lack of a centralized view of their overall BNPL spending. This reinforces the concern that BNPL’s convenience can mask the true financial risk.
The Path to Financial Wellness
So, how can Afterpay’s new policy be optimized for responsible spending? Here are some key considerations:
Financial Literacy Education
Equipping users with budgeting tools and financial knowledge is crucial. BNPL providers can play a role by offering educational resources within their apps.
Transparency Around Fees
Highlighting late fees and other charges associated with BNPL transactions can help users make more informed spending decisions.
Responsible Borrowing Limits
Setting spending limitations based on a user’s financial situation can prevent excessive debt accumulation.
Afterpay’s recent policy offers more control over BNPL repayments. While this seems helpful, it’s crucial to address impulsive spending within the system itself. Financial literacy education, transparent fees, and responsible borrowing limits are key. Ultimately, conscious consumption is king. BNPL can be a tool, but responsible budgeting habits are essential to avoid a debt trap.