Afterpay announces changes for Australians

Afterpay has announced that it will introduce a spending cap feature which is expected to launch later in 2024.

The Buy Now, Pay Later service announced the new feature to its customers via email Tuesday morning.

“This feature will launch later in 2024. When available, it will allow you to set a cap on how much you can spend with Afterpay with a few simple taps in the app.”

Afterpay users can create an account without undergoing an external credit check, and using the platform does not impact their credit score.

Initially, customers have a borrowing limit of $600, which can increase as they continue to use the service.

“The more responsible you are as a shopper with Afterpay, making all your payments on time, the more likely you are to have more money to spend,” its website states.

According to a recent study, in March this year, as many as 20% of BNPL users paid late fees, compared to just 5% in 2020.

Graham Cooke, Finder’s head of consumer research, warned Australians should be aware of the risks of products like Afterpay and not use them frequently.

“Responsible use of BNPL services requires careful budgeting: users should avoid relying on them for their daily expenses,” he said.

“While this is convenient, it is not without risk. Overspending, late fees and potential debt accumulation are risks.”

Afterpay today announced it will be introducing a spending cap feature that is expected to launch later in 2024.