What’s the Smart Way To Pay For Fashion?

Some things can’t wait for payday.

You can’t always control when you see a great bargain or you need a new outfit, but you can control how you pay for it. There are Smart Ways and Dumb Ways to pay.

So let’s say you’ve got a wedding or a party to attend and you need a $250 outfit. We’ve looked at the options from Cash to Debit Cards, Buy Now Pay Later, Credit Cards and Payday Loans.

Below you can see what the cost of each option is, and what the worst case scenario is after a year if you incur the maximum amount of late fees and/or interest.

The inside of a clothing store - dummies clothed in the latest fashion

NUMBER-CRUNCH: SMART WAYS TO PAY FOR A $250 OUTFIT

WAYS TO PAYVERDICTBEST CASE*WORST CASE*HOW IT WORKS
CASH
$AUD
SMART$250N/A
DEBIT CARD
Visa or Mastercard
SMART$251$2510.5%-1% merchant fee
BUY NOW PAY LATER
Afterpay
SMART$250$3184 fortnightly instalments, late fees of $10-17
BUY NOW PAY LATER
Zip Pay
SMART$262$322Min. $40/mth repayment + $6/mth fee
BUY NOW PAY LATER
Humm
SMART$266$3505 or 10 fortnightly instalments, monthly fee up to $8, late fee $6
BUY NOW PAY LATER
Klarna
SMART$250$2784 instalments, late fee $7
CREDIT CARD
Low-rate card
OK$268$35810% p.a. interest + 2% merchant fee
CREDIT CARD
Standard card
DUMB$280$45120% p.a. interest + 2% merchant fee
PAYDAY LOAN
Nimble
DUMB$320$42020% of the purchase + 4% a mth

*‘Best case’ is the cost to you if the outfit is paid off after 2 months. ‘Worst case’ is the total cost if the outfit is still not paid off after 12 months, and you’ve incurred the maximum amount of fees and/or interest. Note that we have NOT included the annual credit card fee in the ‘worst case’ cost for credit cards.

HOW DO YOU FIND THE BEST FASHION DEALS?

1. Never pay full price! Tune into retailer sales & subscribe:

You know who your favourite brands are. So make sure you never miss a sale with them: subscribe to their email database and follow their socials. See if they have an outlet and make sure you’re on that list too.

And do the same with the big online fashion retailers. Here are a few examples:

THE ICONIC
Website: https://www.theiconic.com.au/
Insta: @theiconicau
Facebook: @iconicau
TikTok: @theiconicau

ASOS
Website: https://www.asos.com/au/
Insta: @asos
Facebook: @asos.aus

Showpo
Website: https://www.showpo.com/
Facebook: @iloveshowpo
Insta: @showpo
TikTok: @showpo_official

2. Check bargain forums, cashback websites & BNPL apps (and subscribe to them too):

Keep an eye out for deals and sales via BNPL apps, online bargain-hunting forums and cashback websites. Here are some of the best:

Afterpay On Sale

The Buy Now Pay Later market leader has regular bargains and deals with its huge range of thousands of retailers.

Afterpay homepage - showcasing fashion websites

Humm Deals

The ‘bigger Buy Now Pay Later’ has occasional sales with retailers of homewares, sporting equipment, holidays and other bigger purchases.

Shopback

Gives you up to about 10% cashback (and sometimes more for special deals) when you click through to hundreds of retailers and buy something. The cashback you accumulate can then be withdrawn into your bank account or via Paypal.

Shopback main page - with clothing front and centre

Cashrewards

Automatically pays you up to about 10% cashback (and sometimes more for special deals) when you buy something from hundreds of partner retailers by clicking through form Cashrewards or using your linked Visa/Mastercard. The cashback you accumulate can then be withdrawn into your bank account or via Paypal.

Cashrewards homepage

Ozbargain Fashion

Australia’s biggest online bargain-hunting community, where businesses and members can post deals and others can then vote them up or down. Has a ‘Fashion & Apparel’ section:

ozbargain homepage

Fashion Lane

“Fashion Lane is a website where you can find the best fashion sales from 512 online fashion stores. Instead of visiting every fashion store and going through their sales individually, Fashion Lane aggregates all sales and lists them, sorted by highest discount.”

fashionlane homepage

3. Diarise the big online sales events:

There are now several big online sales events each year – most of them in the lead-up to Christmas – where retailers offer big discounts.

Some are run by a single online retailer such as Kogan or Amazon, while others occur across ALL online retailers.

It’s worth diarising these and subscribing for notifications if you’re in the market for a good deal on a particular product. You might get it half price!

SALEWHEN
Amazon Prime DayUsually July
Kogan First DayUsually Oct
Click Frenzy2nd Tuesday in Nov, plus other events
Singles Day – all online retailersNov
Black Friday – all online retailersNov (the day after Thanksgiving)
Cyber Monday – all online retailersNov (the Monday after Thanksgiving)

👉 PRO TIP: USE THE FREE TRIALS
Both Kogan First and Amazon Prime require membership BUT they offer 30-day FREE trials so you can look at the deals and cancel before the fee kicks in, if you choose to do so.

HOW DO YOU AVOID GETTING INTO DEBT?

Use cash you’ve saved, when possible

The best way to pay for anything is with cash you’ve saved. There’s no interest, no fees, and you’re 100% in control. So put aside some of your pay cheque each month for shopping: most banks will even let you create a separate account for free and you can automatically save some of your pay there each time. Create another one for bills, one for emergencies and so on. It’s called the ‘envelope strategy’, because in the old days people used to divvy their pay up into different envelopes to help make it go further.

Don’t pay interest or late fees

If you can’t pay with cash, the smart thing to do is to find a no-interest option and pay your instalments on time so you don’t incur any late fees. Don’t put clothes on a credit card that charges you 20% p.a. Or – even worse – take out a short-term ‘payday loan’ that charges you over 50% p.a. Interest. You might pay it back before the interest kicks in, but then again you might not. There’s no need anymore to pay that sort of fee, which compounds and compounds if you don’t pay it back and can trap you in debt. Likewise, don’t be late with your BNPL payments or you can end up paying fees and being cut off. To make sure you’ve always got some cash for your instalments, see point 1 above.

This goes without saying: if you’re avoiding credit cards to buy clothes, but putting them on a BNPL account that’s linked to… a credit card, it’s pretty much the same thing. Link your BNPL account to a debit card and manage your money so there’s always some cash on it. That’s the Smart Way To Pay.

Any information is general advice, it does not take into account your individual circumstances, objectives, financial situation or needs.

Check KILL BILLS for more helpful tips about saving.

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