Afterpay interest-free payments

You might have already seen Afterpay as a payment option in stores and online. When you buy something, you can simply select Afterpay as your payment method and have eight weeks to pay the amount back in four instalments, with no interest. Costs only incur if you fail to make your repayments on time.

It’s already fully integrated into a lot of Australian stores so that you can buy now and pay later. Find out how Afterpay works here.

How does Afterpay work?

You can start shopping with Afterpay by signing up and linking an Australian Visa or Mastercard debit or credit card. All you have to do is sign up and confirm your details.

• Online. Buy online by selecting Afterpay at the checkout.
• In store. Buy in store at selected retailers by using your phone to visit afterpayit.com.au and entering the amount you want. You’ll get a barcode on your phone that can be scanned at the cash register.

Two weeks after you’ve made your purchase, you’ll need to pay back the first quarter of the outstanding amount, with the remaining quarters paid back every two weeks after that. Payments are processed automatically. You’ll receive reminders before payments are due.

In order to make sure the service is free to use for everyone, the amount you can spend at any one time may be subject to approval. Purchases over $500 will require the first quarter of payment at the time of purchase. All this information will be communicated to you before you’ve paid, so you can always make an informed decision.

See the full Afterpay store list

Features of shopping with Afterpay

• No interest. It works like a no-interest loan. You have longer to pay for your chosen item, for no added interest.
• No advance signup for in-store purchases. Even if you don’t have an account, you can still walk into a selected retailer and choose Afterpay. You’ll just need to sign up later.
• Manage your account. Sign in to see your upcoming payments, orders and account information.
• Reminders. You’ll be notified ahead of time when a payment is coming up and how much it is, so that you can make sure there’s no overdrawing.
• Automatic deductions. Each quarter amount is automatically deducted from your chosen card to make sure you can keep up with your repayments, even if you’re busy or you can’t get online.
• Refunds and more. You can still get a refund for purchases you’ve made with Afterpay, in line with each store’s refunds policy.
• Pay in advance. You can pay instalments ahead of time, penalty-free.
• Market-leading security. Afterpay is a PCI DSS Level 1 certified compliant service provider. This is the highest level of payment security there is, for both your card details and your personal information.

How much does Afterpay cost?

There are two costs involved with Afterpay. One of them is the cost of the item you’re buying. The other is a late fee for missed instalments.

If a deduction is unsuccessful, you will be notified and you will have a chance to log in and choose a different payment method. Failure to do so will incur a $10 late fee. If you fail to make a payment within seven days, you'll be charged a further $7. For each Afterpay order you can be charged a maximum of one $10 late fee per order. For any order of $40 or above, you can be charged late fees of 25% of the original order, or a maximum of $68 - whichever is higher.

If you fail to make repayments, Afterpay holds the right to report it to a credit reporting bureau.

Is there a limit to how much you can spend with Afterpay?

Your limit depends on whether you have linked your Afterpay account to a debit card or credit card. If you linked your account to a debit card, then you can't have more than $500 outstanding or your next purchase won't go through. If you have a credit card linked to your account, then your limit is up to $1500.

If you've linked your account to a debit card but want to access the higher limit, you can always switch your account and link it to a credit card.

Does Afterpay do a credit check?

No. You'll be automatically approved as long as you're 18 and have a working credit or debit card.

How to sign up for Afterpay

In order to sign up you have to:

• Be at least 18 years old and capable of entering into a legally binding contract
• Have a valid and verifiable email address and mobile number
• Have an Australian credit or debit card

Afterpay is not a store credit application. You don’t have to sign anything or fill out an application form. All you have to do make sure you’ve read the details and signed up online.

Watch: Afterpay vs Credit cards: Which is better?

Have more questions about Afterpay?

• How does Afterpay make money?

  Afterpay doesn't charge customers to use its service, but rather makes money by charging retailers fees for offering the service. It also makes some money (approximately 17%, according to SMH) by charging customers late fees.

• Is it really 'interest-free'?

  Afterpay's platform will not charge you interest. However, if you use a credit card as your payment method then you can be charged interest. Interest-free periods on credit cards are usually 55 days if you have paid your previous statement period's balance in full, whereas Afterpay offers repayment terms of 56 days. Check the interest-free period on your credit card and aim to repay it within that timeframe if you really don't want to be charged interest with Afterpay.

• Can I get a refund on an item I've purchased with Afterpay?

  Yes, full and partial refunds are available. Keep in mind you may be charged for the item by Afterpay if the refund has not been processed by the retailer yet. However, you will be refunded for any payments.

• How do I know how much I have to spend each time I make a purchase with Afterpay?

  Unfortunately, you don't. Afterpay uses an automated system to approve you for an amount on a purchase-by-purchase basis. According to Afterpay, the longer you've held an account and the more purchases you successfully repay, the more likely you are to be approved for a higher amount.