As the festive season approaches, with Black Friday sales and Christmas shopping on the horizon, many Australians are gearing up for the biggest spending spree of the year.

However, this year, a significant change is coming to one of the country's most popular payment platforms, which could impact how you manage your finances during this busy period.

Afterpay, the buy now, pay later (BNPL) service that has revolutionised the way we shop, has introduced a new feature that aims to empower customers with more control over their spending.

The ‘Spend Cap’ feature is a thoughtful addition to the platform's suite of financial management tools.

It allows shoppers to set a personal spending limit to ensure they stay within their budget.

Afterpay's new ‘Spend Cap’ lets shoppers set spending limits. Credit: Shutterstock

Here's how it works: Customers can now select the ‘Spend Cap’ feature and specify an amount they are comfortable spending, which must be below their approved limit but above $100.

Once set, this cap is immediately applied to the account, helping users to avoid the temptation of overspending.

But that's not all! Afterpay has also rolled out other features designed to enhance the user experience.

The ‘Preferred Payment Day’ option lets customers choose the day their payment is debited from their account, aligning with their payday and potentially helping to dodge those pesky late fees.

Meanwhile, the ‘No Payment Upfront’ feature, available to approved shoppers, allows purchases under $500 without any initial payment, providing even more flexibility.

For those who find themselves in a pinch, Afterpay has considered that, too.

Rescheduled payments and the option to pay early are available, offering an extra week's grace without incurring late fees.

Afterpay's Executive Vice President and ANZ Country Manager, Katrina Konstas, has emphasised the company's ‘dedication’ to customer ‘choice and flexibility’.

‘We prioritise the financial well-being of our customers and are committed to providing tools that support economic access and empowerment,’ she stated.

‘Our new Spend Cap feature is a testament to our mission of promoting responsible spending, ensuring our customers can enjoy the benefits of BNPL with confidence and peace of mind.’

The ‘Spend Cap’ feature, according to Konstas, is a testament to Afterpay's mission of promoting responsible spending, ensuring customers can enjoy the benefits of BNPL with confidence and peace of mind.

This new feature is expected to encourage responsible spending habits and give shoppers a greater sense of control, especially during a time when the cost of living is a growing concern.

With the ‘Spend Cap’ in place, Australians who start their Christmas shopping early on the platform can finish their repayments by Christmas or Boxing Day, thus avoiding the dreaded ‘debt hangover’ in the new year.

The timing of this overhaul is particularly pertinent as Afterpay has recently partnered with IKEA, allowing Aussies to budget for furniture purchases both in-store and online.

Introduced in September, the ‘Spend Cap’ feature is part of a broader initiative to promote responsible spending habits.

Despite the financial pressures many are facing, a significant portion of Australians—59 per cent, to be exact—still intend to spend the same amount or more this Christmas compared to last year.

However, it's worth noting that the Australian government is looking to tighten regulations on BNPL services, with proposed new laws being introduced in parliament.

The government's stance is that BNPL providers have not been adequately regulated by Australian consumer credit laws, which means these businesses are not subject to the same affordability checks as those required for credit cards or loans.

As the holiday season approaches, Australians are facing new challenges and opportunities in their financial planning.

With Afterpay introducing a ‘Spend Cap’ to help manage Christmas shopping expenses, many are finding ways to keep their budgets in check.

However, it's important to remain cautious, as recent reports reveal that while the average debt among buy now, pay later (BNPL) users has decreased, late fees still pose a significant concern for many.

This juxtaposition highlights the need for mindful spending and awareness of the potential pitfalls associated with BNPL services, ensuring that festive cheer doesn’t come with a hefty price tag.

Key Takeaways

• Afterpay has introduced a new ‘Spend Cap’ feature that lets shoppers set a limit on their spending.
• Customers can choose their Preferred Payment Day and use the No Payment Upfront feature for purchases under $500.
• Afterpay aims to promote responsible spending and financial well-being through these new features.
• The Australian government plans to regulate buy now, pay later services more closely amidst concerns over consumer protection.

We'd love to hear from you, our savvy Senior Discount Club members! What are your thoughts on Afterpay's new ‘Spend Cap’ feature? Will it change the way you approach your holiday shopping? Share your experiences and strategies for managing your budget during the festive season in the comments below. Let's help each other have a financially stress-free holiday!

 

[Caron]

I love my Afterpay, I always pay on time and have never had to pay late fees. The convenience of this interest free credit card really works for me.

 

[NotNats]

Have never used it and never will - it's too much like Hire Purchase and a deadly trap to fall into.

 

[deni67]

I love Afterpay too, I have got many things over the years with small fortnightly payments that are easy to manage, especially when I use Temu.
But this statement in the above:
"Meanwhile, the ‘No Payment Upfront’ feature, available to approved shoppers, allows purchases under $500 without any initial payment, providing even more flexibility."
That has stopped, at least for me it has.

I also use Zip Pay, which is a line of credit, that's a bit different to Afterpay, you can actually get a one time credit card to use if you're stuck, the payments on that are monthly, but you can fall into a trap as they keep offering you more and more and there is an interest to pay each month so it takes much longer to pay it off than it does with Afterpay.
I learnt the hard way with that one and I don't use it anymore, I just pay it monthly, but I can change the payment date on that as well to coincide with my pension.
But it's there if I ever need it, I hope not to!

 

[Kookai]

I have used Afterpay. I am delighted with their ‘No Payment Upfront’ feature. Afterpay has lightened the financial burden by allowing 4 instalment payments. Thank you Afterpay!