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Buy now pay later services

Know the costs before you sign up

Page reading time: 3 minutes

Buy now pay later means you pay by installments over time, instead of paying the full amount upfront.

Find out how buy now pay later works and what you need to know before you sign up.

How buy now pay later works

When you use a buy now pay later service, you can buy a product and delay payment. You usually pay off your purchase over a few weeks. For bigger purchases, it may be longer.

You don't pay interest on the purchase. Instead you're charged fees, and they can add up quickly.

Lots of shops offer different buy now pay later options. Buy now pay later providers include:

Before you sign up to buy now pay later

What to look out for

While buy now pay later services can be convenient, it can make it more difficult to track your spending.

Before you sign up, keep in mind:

It can be hard to meet repayments. In 2018, ASIC research into buy now pay later services found that to meet repayments, one in six consumers had either:

Compare the fees and charges

Buy now pay later services are often advertised as 'interest free' or '0% interest'. But they charge fees that can add up quickly. They may charge:

You may also have to pay bank fees:

Using a buy now pay later service

We explain how buy now pay later works and some tips on what to look out for if you use buy now pay later services

Tips for managing buy now pay later

To make the most of buy now pay later services:

What to do if you get into trouble

Most buy now pay later providers have dedicated complaints and hardship services. Contact your provider if you have a complaint or if you're having trouble making repayments.

If you're struggling to make repayments, you can also talk to a financial counsellor. They offer a free and confidential service to help you get your finances back on track.

Teenage girl sitting on a stool using a tablet.

Georgia pays more for buy now pay later

In the lead-up to Christmas, Georgia decides to take advantage of online sales. She finds a new pair of designer sneakers for $150. As money is a bit tight, Georgia signs up to a buy now pay later service to split her payments.

She then finds a hair straightener for $300 at another store. She uses a different buy now pay later service to buy the straightener.

A fortnight later, Georgia discovers that her bank account is overdrawn. Before she bought the items, she hadn't checked whether she would have enough in her account to make both repayments.

Both buy now pay later providers charge Georgia missed payment fees. Her bank also charges her an overdrawn fee. Georgia is now waiting to see if the record of late payment will appear on her credit report.