So, what exactly is Afterpay and how does it work

Read on to see why the fashion crowd can't seem to get enough of Afterpay.

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It feels like just last month there was no such thing as Afterpay and now all of a sudden no one can stop talking about it. This business has absolutely exploded. With more than 48,000 Facebook fans and nearly 6000 Instagram followers, it’s clear that a lot of people simply can’t get enough of Afterpay. So what exactly is it? And why are people so hyped about it?

Or to see the full list of stores offering Afterpay you can head to our alphabetised Afterpay stores directory.

What is Afterpay?

Afterpay is a bit like lay-by, but you get to take home your purchases before you’ve finished paying for them. It’s a payment option you’ll see at many of your favourite online stores (some instore too). If you select to pay with Afterpay, your purchases will be posted to you as normal but you get eight weeks to pay off the total purchase price.

What makes Afterpay great is that it’s all automatic. Once you make an account, all the payments will be deducted from your credit card or bank account on a nominated day. They will send you text messages before they withdraw the funds, and unlike a credit card, you don’t have to worry about making payments, Afterpay does it all for you automatically.

How does it work?

Afterpay is offered as a payment method in the checkout section of some stores. To see which stores, you can check out our article about which stores offer Afterpay. Select Afterpay instead of Visa or PayPal and then when you go to pay, you’ll be redirected to the Afterpay site. If this is your first time using it, you’ll be asked to make an account and give your phone, bank and address details. If you already have an account, you’ll just be asked to sign in.

If you’ve used Afterpay before, that’s it. You don’t have to make an immediate payment, and the payments will be automatically deducted in four equal amounts every two weeks. If this is the first time you’re using it, you’ll be required to make one of the four payments immediately and then one every two weeks after.

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What about fees and interest?

Nope. No fees. No interest. Can you see why shoppers love it so much? The only potential additional charges come from failing to make a payment. You get several text messages before a payment is withdrawn, but if by some chance you miss them and there isn’t enough money in your account to cover the payment, Afterpay may charge you a fee. Once the payment bounces, Afterpay will send you a reminder and you will have 24 hours to log into your Afterpay account and make the payment. If you don’t, you’ll be charged a $10 late fee. If you still haven’t made the payment after another 7 days, then you’ll be charged another late fee of $7.

Who can use Afterpay?

Since Afterpay isn’t a loan company or credit union, you don’t need to be approved for an account like you would a credit card or personal loan. The only criteria are that you must be 18 and have a credit or debit card you can link your account to.

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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.

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Is Afterpay online only or can it be used instore?

Some stores, such as Topshop, accept Afterpay instore. But for many stores, they just use Afterpay for online purchases. The best way to find out is to check out our list of stores that offer Afterpay and get in touch with the store directly.

Watch: Afterpay vs. Credit cards: Which is better?

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8 Responses

  1. Default Gravatar
    MaryJanuary 5, 2019

    How come it gave me an option to pay every week instead of every 2 weeks?

    • Avatarfinder Customer Care
      CharisseJanuary 6, 2019Staff

      Hi Mary,

      Thanks for reaching out to finder.

      How Afterpay usually works is that you will be asked to pay your first installment (25% of the order value) at the time of purchase and then pay the remainder over 4 equal installments which is due every two weeks.

      Since in your case, you were asked to pay weekly, you may want to contact Afterpay directly for further assistance on this.


  2. Default Gravatar
    ShannonDecember 13, 2018

    What’s the max first time amount?

    • Avatarfinder Customer Care
      JohnDecember 18, 2018Staff

      Hi Shannon,

      Thank you for reaching out to finder.

      Afterpay has a limit of $1000 if you are linking a credit card for your re-payments. If you are using a debit card you will have a limit of $500. Hope this helps!


  3. Default Gravatar
    NayJune 15, 2017

    Does afterpay charge account service fees?

    • Avatarfinder Customer Care
      RenchJune 15, 2017Staff

      Hi Nay,

      Thanks for your inquiry.

      There are no fees and no interest in using Afterpay. The only additional charges that may occur are from failing to make a payment or there isn’t enough money in your account to cover the payment, Afterpay may charge you a fee.

      Have a great day!


  4. Default Gravatar
    EmilyJune 5, 2017

    I am curious as to whether Afterpay affects your overall credit rating. For example, if I was to go for a home loan or personal loan, would it like possibly be a setback?

    • Default Gravatar
      LiezlJune 5, 2017

      Hi Emily,

      Thanks for your question.

      Yes, Afterpay can affect your credit score since it’s also a credit product. If you have any negative activity in your Afterpay account, they can report it to credit reporting agencies and it will reflect on your credit file. You may read our guide here on how interest-free payments affect your credit rating for more information.


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