‘You Can Justify Everything’: I Became Addicted to ‘Buy Now, Pay Later’

Annabelle Cannon used to only spend what she had in her bank account. But after discovering “buy now, pay later” services, that all changed. 

Soon, she was buying clothes, flights, skincare products, and tickets to theme parks. Cannon, a 27-year-old talent coordinator at a startup in Australia, knew she couldn’t afford all the things she was buying. But the convenience of paying things off over time using Afterpay, her buy now, pay later service of choice, made it easy to ignore the reality of her financial situation. So long as she made the payments on time, she told herself, she wouldn’t have to pay interest or any late fees, and she would get closer to living the life she wanted.

But over time, the situation got away from her, and she found herself paying things off for a year and a half straight. Before buy now, pay later, she had always made sure to pay her bills first and spend the rest afterward. But as the payments piled up, Cannon one day found herself unable to pay her rent, but also unable to stop. 

“It definitely started to get to an addictive point,” Cannon said. Realizing she had a problem, Cannon decided to quit. Now, she is speaking about her experience with Afterpay in hopes of helping other people avoiding the situation she found herself in.

Afterpay did not respond on the record to a request for comment. The post has been edited for clarity.

People don't get into debt because they think it's a fun experience. I remember using buy now, pay later services once in 2017. I wasn't much of a spender back then. But as I started moving to full-time work in 2018, certain things would pop up, and buy now, pay later would just be convenient. Then close to the pandemic, and especially during lockdown, everything kind of blew up. 

I don't know if it was simply that I was bored and home alone. But there were like 18 months where I was just always paying something off. I would buy something with Afterpay. Then because I was paying it off, I couldn't buy another thing that I wanted. So I'd have to put that on Afterpay. And that led to this cycle of not being able to buy things outright because I'm still paying this other stuff off. So I’d have to put it on that service if I want to get it. And that spiraled me out.

My mindset changed. Instead of saving up or having to wait and think about the purchase, I could just get it. It's real instant gratification and takes away the anxiety. And you start to fill your head with justifications. Your brain starts to go, “Oh, by the time I save for it, it might be out in my size.”

You get to points where you’re stuck in a debt cycle of saying I can't afford to buy these things outright, because I'm paying off this debt, so then I have to put the next purchase onto buy now, pay later to get it. It keeps you in this loop.

Another trap is this concept of buy once and buy well. You think I've got to buy the better-quality item because it will last longer, but you can't afford it upfront. I bought a vacuum on a buy now, pay later service because I had originally bought a $90 handheld vacuum that melted itself. I was like, “OK, I just need to get a better-quality vacuum, which is what I've done here.” 

[Some people might say] “Okay, fair enough.” But I’ve also bought clothes. I've bought flights. I’ve bought skincare products and tickets to theme parks and all these other random things that at the time felt justifiable, but that I probably could have saved for. You can find a way to justify everything. And when you put it on a loan service, you justify getting a bit more, because you're paying it off over time. That's where it escalates. I would end up buying more than I really would need.

I would trick myself into it. A lot of times, I would say, “I can pay for it now. But I'll just whack it on here. Because it's more convenient.” It's that simplicity of four payments. They don't have any particular fees as long as you pay it off. So in my head, it's not going to be looming over me forever. 

It got really ridiculous. Then last year, when I got my tax return, I was like “I'm going to pay off my balance and not use it again.” But I ended up back on it.

It definitely started to get to an addictive point. I remember, when my housemate would get something in the mail, my body would be like, “Ah, I love getting things in the mail. I want to get something in the mail.” It will make you want to go and get something, because it was something to look forward to.  

You’d buy it, but it doesn't come out of your account, so it doesn't feel real. And then you get to track it on the apps and you think, “Oh, it's coming.” And then it gets here, and you can open it and you have that little bit of excitement. And then it goes away, and you're like, “Oh, okay, I need a little bit more of a hit.” 

I've always grown up saying no matter what, you pay your bills first. But it actually got to a point where it affected my rent payments because I had an Afterpay payment that was coming right as my rent was due. That was a big wake-up call. I was like, “Oh, my gosh, this has just consumed me.” It felt like a relapse.

They increase how much you can have without notifying you or checking your income and expenses. I started off with $1,000 or $1,200 [in Australian dollars]. And I didn't even realize that my limit had gone up to two and a half grand. Very recently, they actually increased it to three grand. So I could get up to three grand in debt. I wasn't paying attention to how large my balance had become. I got up to like $1,200-$1,300 at one point, and I just thought, "How has this happened?" [Editor’s note: Afterpay says it increases limits for “responsible” customers who make payments on time, adding that limits are “clearly listed in the account” and that the company performs “soft credit checks”  that within the U.S.]

At first, my partner didn’t understand why people would use the service at all. But the service has come about because there's obviously a need, and there's a lot of people who are lower income who don't have the privilege of being able to buy certain things outright or it's hard for them to save for things that they may need straight away, such as appliances. I think services like this could really be used for good.

But it's also a double-edged sword. Yes, there's no interest. But you get charged if you do make a late payment, and they’re not actually giving people limits based on what they can afford. They’re just giving them a number and saying, "good luck." It’s not responsible lending. [Editor’s note: Afterpay says the company caps its late fees and does not let customers buy anything else until a late payment is settled.]

A lot of people tend to blame the individual, as opposed to the company. They say just use it properly or “I've never had a problem.” But I think these services target people who have a lack of financial literacy, especially younger women. With Afterpay, there's no monthly statement. So they’re not actually helping people understand their spending habits. I think if you're going to lend money, you need to be able to give people the resources to understand where they are financially. [Editor’s note: Afterpay says it does “not provide a statement of account” since it is a “digital product” but that the app “clearly lays out payments made, payments due, and the due dates.”]

When my most recent tax refund came in, I tried hard not to use all of it there. Because I had other things I wanted to do, like build up an account that I can access in case of an emergency. I've just finished paying off my Afterpay balance and gotten rid of everything. So I can just focus on building up a little bit more in that emergency account, planning out things and just trying to save a lot more. 

I'm trying out an alternative where instead of buying something and then having to pay it off., I'm going to save for it and then see if I still want it by the end of that time. It takes away that anxiety of having to have it now. Now, if people want to go out to dinner with me, I just have to say to them, “Hey, you know, I'm not in that position, can we do something else?”  

Money has always been a stressful topic. We don't talk about it. What I've found is that being open to talking about money has made it less scary or taboo. There's that conversation about debt and stress. But there's also now this room to talk about your wins. I've had friends say to me, like, "Ah, I paid off and canceled my credit card." And we'll celebrate that. It's been a really healthy experience for me. 

Update: In an emailed response after publication, an Afterpay spokesperson said the company views itself a “budgeting tool” and an alternative to the traditional credit card system. . The company primarily makes money by charging retailers and merchants a fee when someone uses Afterpay to buy a product, not through late payment fees incurred by customers, the spokesperson said. With customers, Afterpay charges no interest, caps late fees, and suspends transactions when customers miss a payment. 

 “Afterpay turns the credit model on its head by encouraging people to use their own money and pay over time,” a spokesperson said.

This post has been updated to include comments from Afterpay.