Afterpay to introduce self-regulated spending cap for users
Afterpay will introduce a self-regulated spending cap for Australians using the popular product.
The buy now, pay later (BNPL) company today said it would allow users to set a cap on spending via the app later this year.
"This feature is launching later in 2024. When it's available it will allow you to set a cap on what you can spend with Afterpay with a few simple taps in the app," it said in an email to customers.
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Afterpay is offering users the ability to set a spending cap on the app. Afterpay/9News
Afterpay had already enforced an estimated spend limit for users based on payment history including how many late repayments there have been.
Factors like frequent on-time repayments can also increase a user's estimated spending limit.
The incoming spending cap function comes as Finder revealed one-in-three Australian users have missed another bill to afford their repayments in the past 12 months.
This means 2.4 million people have prioritised their BNPL debt over other bills.
The average BNPL debt in Australia has decreased from $1776 in January 2022 to $964 in September.
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The spending limit will be available later this year. Afterpay
BNPL products like Afterpay are more likely to be used by Gen Z and millennial Australians.
Graham Cooke, head of consumer research at Finder, warned Australians should be informed about the risks of BNPL products and not use them frequently.
"Responsible use of BNPL services requires careful budgeting – users should avoid relying on it for everyday expenses," he said.
"While it offers convenience, it's not risk-free. Overspending, late fees, and potential debt accumulation are risks."
The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.
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