In recent years, Afterpay has taken Australian shoppers by storm. It is now easier than ever to get that outfit, book that flight or go on that adventure and pay for it later. It sounds great doesn’t it? What could possibly go wrong? Well here at Adams & Partners, we can tell you that everything is not always how it seems. The Afterpay system is not for the benefit of the consumer.

What is Afterpay?

The concept of Afterpay is quite simple:

  1. Sign up to the Afterpay Platform (no Credit check necessary);
  2. Pay for you 

    purchase in four equal installments due every two weeks, with no penalty if you pay on time! ;

  3. You are charged no interest;
  4. Repeat step 1-3.

Sounds great right?


Well, like all things , it is not as good as it seems to be. The first thing that you need to remember is that Afterpay is a company, who is  trying to make 

a profit.

In December 2018, Afterpay was stated to have over 2.5 million users in Australia. However, February 2019, the CEO of Afterpay Nick Molnar stated that the majority of the company’s revenue comes from retailers who have adopted the product in their tens of thousands. Molnar stated that approximately just over 20 per cent of revenue comes from late fees collected from consumers.

Why you should be wary of Afterpay

What is scary is the fact that because Afterpay do not charge you interest, they are not subject to the Australian National Credit Act. This means that they do not need to hold a credit licence and they don’t need to comply with responsible lending arrangements, such as verifying income and checking existing debts held by consumers.

What is also interesting is the fact that there is no credit check before you apply for Afterpay. They also state that using Afterpay will not affect your credit history. However, if you read the terms and conditions, you’ll find that Afterpay reserves the right to perform credit checks and to report negative activity on your account to credit ratings companies. This means that if you fail to meet your Afterpay payments, a black mark may be lodged on on your record. This could drastically affect your ability to borrow in the future. This could potentially mean that the first home that you are about to purchase could become a wish and not a reality.

What should I do?

Before using Afterpay make sure that you read the terms and conditions! Make sure you understand the service you are signing up for before using it. However, if you are in a spot of bother with Afterpay or any other credit service provider, feel free to give us a call and have a chat.

Written by Cameron Spanner 

Scroll to Top
Scroll to Top