Citi customers can buy now pay later at Kogan.com

Use your credit card to pay off purchases with no interest when you choose an instalment plan over 3 to 24 months.

Citi Australia credit card customers can pay off their next purchase from Kogan with no interest for up to two years. The bank has partnered with the online retailer to offer credit card customers buy now pay later options ranging from 3, 12, 18 and 24 months. New Citi customers can also get up to $400 cashback when they use their card to make their first spend at Kogan.com within 90 days of approval.

To sign up for a plan, you need to log into or create a Kogan.com account, enrol your Citi credit card and then select to pay with instalments at the checkout. You'll be given the option to choose the length of your instalment plan, and you will be shown the relevant one-off fixed payment option fees.

The instalment loan will be paid for by using a portion of your existing credit limit, so you don't need to undergo any additional credit checks to be approved for the interest-free finance. This also means you can spend up to your maximum credit limit. This differs from other buy now pay later services that generally offer smaller limits between $500 and $1,500.

You'll be required to pay equal payments each month and how much you're expected to pay will be confirmed when you're applying for the interest-free finance. So let's say your balance at the Kogan.com checkout is $1,500 and you choose the 12-month plan. You'd be required to pay equal payments of $125 every month for 12 months. This is on top of the minimum repayment you'll need to pay for any other transactions you've made with your credit card.

Unlike other purchases, you can't balance transfer the remaining amount from your Kogan purchase to another card if you're unable to pay it off before interest applies. With this in mind, you should make your payments on time and ensure you pay it off before your instalment plan period ends.

Although there are plenty of banks providing low-rate instalment options with big brands, Citi is the first Australian bank to provide a buy now pay later offering of this nature with a retailer in Australia. However, it may be a sign of the times as we see more Australians making use of buy now pay later services.

ASIC's review of buy now pay later services reported that 2 million Australians used these services in 2018. Even if you haven't used them yourself, you've probably noticed many of your favourite retailers offering payment alternatives like Afterpay and Zip Pay at the checkout.

According to that same ASIC review, one in six users had become overdrawn, delayed other bill payments or borrowed additional money to cover their buy now pay later purchases. So it's important to make sure you're paying off your instalments on time regardless of which buy now pay later service you're using.

Picture: Getty