Are young people “suckers for the illusion of free”?

A recent SMH opinion piece argued that Afterpay users are “suckers for the illusion of free”. What do we here at SmartWayToPay think?… Fair enough, there’s no such thing as a free lunch – BNPL does charge late fees and merchant fees, and Millennials are not mugs. We know that. But the piece is far too kind to credit cards by arguing there isn’t much difference. The reality is credit cards would be unviable if everybody – or even most customers – paid off their debt in the interest-free period. Credit cards feed on delinquency. The BNPL business model, on the other hand, does not allow consumers to revolve in debt. Late fees are low and capped. As soon as a customer misses a payment, they’re cut off. Imagine credit card providers did that!

The best way to pay for anything is with cash you’ve saved. But if you need a loan, Millennials are smart enough to see Afterpay and other BNPL options are a much smarter choice than 20% on a credit card.

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