Afterpay Is Making Layaway Sexy for Millennials—but What's the Real Cost?
Millennials have already been trying to take control of their finances. Only one out of three of them has a credit card, and they use debit cards for purchases more than other forms of payment. Experts say this could be a reaction to the 2008 recession—this age group is wary about getting in financial trouble—and overwhelming student loans. “There’s an overall shift in millennials’ attitudes toward credit cards because of student debt [which 41 percent of them carry],” says Rebecca Liebman, cofounder and CEO of LearnLux, a digital platform which helps young adults make better financial decisions. “A lot of people don’t want to get into even more debt, and that’s exactly what they associate credit cards with.”
Several young women told Glamour they are suspicious of using credit cards, and many said they’d never had one. “I only use my debit card,” says Naila, a 21-year-old student in Lincoln, Nebraska. “I just don’t trust myself to have a credit card.” Instead of charging her purchases and then paying them off over time on credit with interest, Naila has used Afterpay to buy a light red Fjällräven backpack ($80 over four payments of $20) and new snakeskin mules from Anthropologie ($108, paid in four installments of $27).
Most of the women I spoke to didn’t go out seeking a payment plan. They were just aimlessly online shopping when they stumbled upon this new option they’d never heard of before. And for many, in that instant the clothes and products that seemed out of reach suddenly felt affordable. Christina, a 29-year-old mom of two and aspiring beauty blogger living in New York, first learned about the service from Kylie Jenner. “I remember when she announced on social that Kylie Cosmetics would have Afterpay. I was so excited because I was like, ‘Wow, Kylie’s products are so expensive!’ And I’m like, I want a palette but I don’t feel like dropping $60 on something I never use,” she says. But Afterpay gave her a way, and since then she’s used it to score a Jaclyn Hill kit from Morphe and other luxe lipsticks.
That’s why payment models are appealing to stores too. “For a lot of our customers, spending $300 on a pair of shoes is a splurge,” says Haley Boyd, the founder of Marais USA shoes. Afterpay, she says, “really eases their purchasing power.” Many retailers report a significant uptick in orders with Afterpay, though Boyd says she has yet to see a significant boost.
Alejandra, 23, a student in Salem, Oregon, admits she’s “super bad” with credit cards. “I would just rack up purchases, then max out [my card], and at the end of the day, I got myself into a hole.” But when Revolve introduced Afterpay, Alejandra still signed up, bought a leopard-print jacket, and has been using the service ever since. In two months she’s spent about $700 on things like “an Urban Outfitters record player for my boyfriend, along with some records, and a few NASA T-shirts, then Gisou hair oil for myself,” she says.
While all of the women I interviewed are happy with their new loot, they realize that without Afterpay they probably wouldn’t have been able to afford their purchases. Simone, an avid Australian Afterpay user since 2016—who provides it as an option for her own clothing company, Simone Tylee, and attributes a third of her sales to the service—acknowledges that having the option to pay in installments has made her hit “buy now” on some things she wouldn’t normally. “I’ve used Afterpay for $2,610 worth of purchases. But if I hadn’t looked that up, I probably would’ve guessed I’d spent only $1,000,” she says. “In most of those cases, I would’ve been more conscious about my choices if it weren’t for Afterpay. As a self-employed adult paying for a car loan, rent, fuel, groceries, and other bills each week, I don’t believe I would’ve been able to afford these things upfront.”
