Headline article image Why Millennials Prefer Afterpay Over Credit Cards

Why Millennials Prefer Afterpay Over Credit Cards

In 2014, Afterpay co-founder and U.S. CEO Nick Molnar—a millennial himself—noticed a shift in how Millennials were spending their money: there was a noticeable aversion to credit cards and the steep interest rates that often came with them. 

“The 2010 recession and rise of student debt led to this shift in spending. Now, 63% of Millennials don’t have a credit card. Millennials prefer to use money they already have, with 2x as many debit card transactions as credit card transactions,” says Molnar. 

Using money they have as opposed to credit is just one of the many reasons why Millennials prefer Afterpay over the traditional credit card. 

Afterpay promotes responsible spending

Here’s a fact: Millennials are saving twice as much as Baby Boomers. Millennials have the discipline to set aside a little money each month or at every payday. This astute money management is the exact behavior that Afterpay promotes, which is why it’s so attractive to Millennials. 

Look at this way: the shopper doesn’t have to pay the entire cost up-front—just 25% of the product cost. Which is great for larger-ticket, “need”—as opposed to “want”—items that she might otherwise not be able to buy. She can budget accordingly and plan for each future payment (four equal payments every two weeks, at zero interest if made on time). Something she is already accustomed to doing as a prudent Millennial. 

Here’s another fact: Afterpay makes more money from people making payments on time than we do from missed payments or late fees. We’re happy when customers are having fun shopping and spending, responsibly. We use proprietary technology to stop you from making orders beyond what you can pay off—can you imagine a credit company doing this? Or stopping a future buy because you missed a payment? It doesn’t happen.

No interest fees

The lack of fees makes Afterpay an attractive option to many customers. Unlike a credit card, shoppers aren’t charged interest and will not need to pay off a lump sum at the end of the month if each payment is made on time. Instead, Afterpay has a staggered payment plan of four payments every two weeks at zero interest, if paid on time.

Even if a late fee is charged at Afterpay, it is likely a lower-cost option than using credit card financing and is capped at 25% of the total order value.

No surprises. Just ease of payment and transparency, unlike high-interest rate credit cards with pages of fine print to comb through.

Immediate Wins

An air-purifier to help an asthmatic child sleep better at night. An electronic bike that cuts a commute by 30 minutes each day. Studio props for a photography business. These items are all necessities as opposed to wants—but are often goods that Millennials wouldn’t be able to afford and get right away. 

Afterpay eases the burden on buying these larger-ticket “need” items, placing them in the hands of Millennials when they need it most. 


Written by
Afterpay Marketing
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