Using Afterpay has risks you should know of, such as late and additional fees, high-interest rates with credit card payments, running into debt, spending limits, difficulty applying for loans, and the inability to choose when to make payments. Nevertheless, you can all avoid these risks if you use Afterpay safely. Together with the benefits it offers, Afterpay also has its fair share of risks enumerated below: Late and additional fees As stipulated in Afterpay’s terms and conditions and as previously mentioned, Afterpay charges late fees and extra fees despite the no-interest advantage. Therefore, there is no excuse if you fail to pay on or before the due date and expect to get charged accordingly. High-interest rates with credit card payments You may have heard that it is advisable to sign up with a debit card using Afterpay. The reason for this is that with a credit card as a payment, there is a possibility you will be facing a high-interest rate if you miss a payment since credit cards typically only offer a 51 or 55 days interest-free period. On the other hand, Afterpay’s payment terms as 56 days. Running into debt The risk of running into debt with Afterpay is possible, mainly if you use it in significant investments that can be difficult to pay off on time. Furthermore, the temptation to use Afterpay every time can make you spend more than your means which will mount up as time goes by, leading to overspending. It can also result in you paying late and additional fees because of your poor spending habits. Spending limits Spending limits can be reasonable or bad, depending on how you see them. Afterpay decides and approves how much money you can use depending on how long you have been a member and your record of diligence in making repayments. In contrast, it can be a good thing for those who spend on impulse. Nevertheless, Afterpay will likely approve any amount you ask if you have no issue with making repayments and have been a responsible user. Difficulty applying for loans Although Afterpay doesn’t do credit checks, it can still affect your ability to get loans since some lenders classify BNPL services as credit. There are instances where loan applicants couldn’t get home loans because they had outstanding Afterpay balances. Thus, your Afterpay purchases will be taken into consideration by some lenders before they can grant you the ability to apply for loans. Inability to choose when to make payments Afterpay is the only one authorized to choose when to schedule your payment plans. Therefore, there is a risk of overdraft or paying late fees. Despite the risks, there are ways you can use Afterpay safely: a. Sticking to a budget Although Afterpay has a spending limit for every customer, relying solely on this does not guarantee you will only spend what is necessary. Instead, set a budget and stick to it. Always set aside money separately for expenses, savings, emergencies, and bills, while the remaining is for your Afterpay budget. b. Using a debit card The best way to avoid paying higher interest rates is to use a debit card instead. It can also help make your spending habits more manageable without the risk of paying more. c. Rescheduling payments if you can Even though you can’t choose when to pay installments, you can reschedule them by shifting them for up to five days for every update. It applies when you think you need more time to make an upcoming repayment. However, you have a shot at this only three times per year. Using Afterpay has perks and downsides, just like every other payment platform that have emerged these past few decades. Knowing how Afterpay works can help you manage your spending and look for habits to avoid debt and have a more enjoyable shopping spree.