What Buy Now Pay Later methods do you use? Afterpay? Zip?

[qldfrog]

I've always wondered why people do this. I use a debit card. Essentially acts like a credit card, but acts like EFTPOS on the back end. That sounds like how most ASF members use their credit card anyway if they pay it off in full each month, so why have a credit card in the first place?

The only reasons I can think of are: 1) to get reward points of some sort, but then your card will probably have a yearly fee. Debit cards are fee free. Or 2) In case you need some emergency money like @aus_trader mentioned before, in which case a debit card won't suffice.

travel insurance, buffer when overseas, I would not like having 10k or more on a transaction account on a regular basis but if jumping on a plane heading overseas, I like knowing have that amount available..in case

 

[Zaxon]

US style of credit rating whereby exhibiting ability to pay off credit raises your credit score; and credit card transactions are supposed to be more secure.

As to the security, I believe a VISA Credit and VISA Debit card both use VISA's credit card front end, so should have the same security level.

The credit score is one I overlooked, and of course makes sense. The flipside to that is if you apply for a house loan, even if your cards are fully paid off, 100% of your available credit balance is considered to be already "used up", since they can't be sure you won't max out your card after you take a loan, so it reduces your potential borrowing amount.

 

[Zaxon]

travel insurance, buffer when overseas, I would not like having 10k or more on a transaction account on a regular basis but if jumping on a plane heading overseas, I like knowing have that amount available..in case

Travel insurance is a good one, and I think specific to certain cards. Perhaps those cards have a yearly fee, but probably cheaper than buying travel insurance separately. And keeping your $10k in a interest earning savings account rather than a 0% transaction account makes sense.

 

[qldfrog]

Old habits, in an age where everything is done for you not to save, makes less senses

 

[Knobby22]

2 out of 3 people under 30 don't own a credit card in the USA.
It's too easy on a credit card to run up a massive debt and bank annual reports attest to the profits to be made.

In Australia:
Australian households have $1.86 billion dollars less credit card debt accruing interest now than they did a year ago.

The RBA statistics for February show that debt accruing interest on personal credit cards has dropped 5.90 per cent from February last year, a drop of $1.86 billion dollars.

The number of personal credit card accounts has also fallen 4.29 per cent year-on-year; that’s 657,722 fewer accounts than February 2018.

In a further sign of the credit crunch, credit limits have also declined 2.58 per cent for personal use, a drop of $3.65 billion.

RateCity.com.au research director Sally Tindall said it’s positive to see people paying down their credit cards.

“For years Australians have been plagued with worryingly high credit card debt. It’s good to see we’re making inroads into this addiction,” she said.

“The new, stricter credit card rules that came into effect this year are likely causing this downturn, as is the popularity of buy-now-pay-later schemes.

“Interestingly, while there are less credit cards in circulation, people that do have them are still using them. The data shows the number of purchases is up 4.29 per cent year-on-year, while the value of purchases remained relatively stable.”

https://www.smh.com.au/business/ban...terpay-beat-expectations-20190415-p51eef.html

 

[Smurf1976]

I've always wondered why people do this.

Historically it was because normal transaction accounts gave you x number of "free" EFTPOS transactions per month after which there was a charge for each and every transaction. That was a long time ago, last century, but it used to be the case.

Today it's just dead easy. Place card on machine, done. No buttons to press for small purchases and all dead easy. It minimises the need to keep cash in an account that isn't paying any significant interest. Plus I'm making a small profit out of the points so the card costs me nothing.

Also I wouldn't want to have only one means of payment since cards can and do fail. So if I wasn't using a credit card then I'd want two separate debit cards linked to different accounts and with a reasonable amount of cash in each. More money tied up.

So credit card is just easy really and universally accepted. If it wasn't for that last point, universal acceptance, then I'd use a different method.

Also probably a bit of a mindset thing having had a corporate credit card with a previous job where it was the preferred method of payment for any minor purchase (anything individual transaction under $5K was considered a minor purchase). It just kept the accounting simple - statement turns up and it's all there in one place.

Only things I wouldn't put on a card would be anything where I didn't want any record of the purchase or where they only take cash. Food at festivals etc is the only thing I've actually bought with cash this year and that's because cash is what they take. That said, well I don't buy anything that I wouldn't want there to be a record of but if I did then I'd pay cash obviously.

 

[Zaxon]

Aus moved to that trashy US style of credit rating whereby exhibiting ability to pay off credit raises your credit score.

As far as I can tell in chatting with my bank about housing loans, the only thing they really seem to care about is loan serviceability, which equals incoming wage - expenses. Strangely, they don't seem to care about shares or cash you own. Likewise, I get the impression that credit score only matters if it's bad. If you've never used credit before, as long as you have a good wage, you'll get the loan.

 

[Belli]

One debit card. Only small amount held in account to pay for parking, coffee and other minor costs.
One credit card. Groceries, petrol and day-to-day expenses. Paid off in full each month.

Rarely carry any cash. If they don't take EFTPOS they don't get my custom.

 

[jbocker]

Buy now pay later? I use THE BEST EVER!!
Wife.

 

[Zaxon]

One debit card. One credit card.

This reminds me. Because I "tap" using my wallet (no need to take out the card), I can only carry one card. Otherwise the NFC fights. And you can't get a credit/debit card without a NFC chip these days.

 

[Zaxon]

I just checked my bank. Credit card yearly fees range from $49-$149. That's reason enough for me to stick with a $0 fee debit card.

 

[Knobby22]

I have a credit card with ME bank.
Low rates and no annual fee. I don't use the big 4 at all for anything. They are so expensive.

 

[Zaxon]

I have a credit card with ME bank.
Low rates and no annual fee. I don't use the big 4 at all for anything. They are so expensive.

 

[Zaxon]

ME Savings account.


I can get 2.9% with my bank, but you have to have no withdrawals etc. ME savings, you just have to tap every week, which I certainly do.

 

[So_Cynical]

Travel insurance is a good one, and I think specific to certain cards. Perhaps those cards have a yearly fee, but probably cheaper than buying travel insurance separately. And keeping your $10k in a interest earning savings account rather than a 0% transaction account makes sense.

Yep, Travel insurance and reward points and the fact that its the credit cards company's money, if anything goes wrong
you are in the clear and its the credit card company's problem, so for a yearly fee of under $100 you can/have.

• Earn reward points
• Travel insurance for you and spouse
• Access to deals and discounts
• Keep your cash in high interest accounts

ME Savings account.

I can get 2.85% with my bank, but you have to have no withdrawals etc. ME savings, you just have to tap every week, which I certainly do.

Or simply put that cash in a 7 month TD and get 2.75% p.a. and use your credit card for everything and save the hassle of tapping your ME debit card every 7 days...its a pain of sorts.

 

[Zaxon]

• Earn reward points
• Keep your cash in high interest accounts

Reward points don't really interest me. I see them through the lense of Barbara from Bank World (if you recall the ANZ ads): The CARROT Card - Can't Achieve Rewards Regardless of Time.

The one that makes sense for me is keeping the cash in a high interest account, then paying off the credit card once a month. Not worthwhile if there's a yearly CC fee, but for a fee free card, it makes sense.

Or simply put that cash in a 7 month TD and get 2.75% p.a. and use your credit card for everything and save the hassle of tapping your ME debit card every 7 days...its a pain of sorts.

We shop every week and always tap, so of the hurdles they create, that one is very simple to achieve.

I see term deposits as largely a creation of the past. Right now, you can get an equivalent interest rate or often higher by not locking away your money, and instead keeping it in a savings account. It seems crazy that I can lock my money away for a whole year, and earn less than having at-call access to it. The only caveat is to find a savings account with the condition that you can easily meet. For instance, have your salary paid into one of their accounts.

 

[Ferret]

Credit cards can be better that debit cards for travelling. Most hotels and car rental companies will put a hold of $x on your card when you check-in or start the hire. This covers them against someone who skips leaving a bar bill etc or car damage.

It can take days even weeks for the hold to be lifted. Doesn't generally matter if its a credit card, but if its a debit card you can find yourself unable to access your own cash.

 

[leyy]

I use afterpay if it is an option.
It is linked with my credit card so win win for me. I get reward points and get to split my payments and get the benefit of extra days of interest free period.

 

[Zaxon]

I use afterpay if it is an option.

Finally! You are a unicorn on ASF.

 

[Belli]

One debit card. Only small amount held in account to pay for parking, coffee and other minor costs.
One credit card. Groceries, petrol and day-to-day expenses. Paid off in full each month.

Rarely carry any cash. If they don't take EFTPOS they don't get my custom.

As an addendum to my post, I am pretty slack about day-to-day or funds which are required to be paid in full each month. I simply don't care.

The credit card I use for all items such as car service, rates, insurances, petrol. Sure the CC has a fee but instead of specific rewards the points are converted into dollar amount and paid back to the CC by the CC provider. Over the year it is more than sufficinet to cover the CC fee. So far this financial year the total amount is $250 and likely one more to come before the end of the FY.